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GREENWICH AIR SERVICES, INC.
GAS TURBINE CORPORATION
GREENWICH TURBINE, INC.
GASI ENGINE SERVICES CORPORATION
MCALLEN COMPONENTS, L.P.
GREENWICH AIR SERVICES - TEXAS, L.P.
-----------------------------
FOURTH AMENDED AND RESTATED REVOLVING CREDIT
AND
SECURITY AGREEMENT
-----------------------------
DATED AS OF JUNE ___, 1996
THE BANK OF NEW YORK COMMERCIAL CORPORATION
(AS A LENDER AND AS AGENT)
AND
THE VARIOUS FINANCIAL INSTITUTIONS THAT BECOME LENDERS HEREUNDER
(LENDERS)
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TABLE OF CONTENTS
I. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Accounting Terms. . . . . . . . . . . . . . . . . . . . . . 1
1.2 General Terms . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Uniform Commercial Code Terms . . . . . . . . . . . . . . . 21
1.4 Certain Matters of Construction . . . . . . . . . . . . . . 22
II. ADVANCES AND PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 22
2.1 (a) Greenwich Borrowing Base . . . . . . . . . . . . . . 22
(b) Turbine Borrowing Base . . . . . . . . . . . . . . . 23
(c) GTI Borrowing Base . . . . . . . . . . . . . . . . . 23
(d) Components Borrowing Base. . . . . . . . . . . . . . 24
(e) GASI Borrowing Base. . . . . . . . . . . . . . . . . 25
(f) Engine Services Borrowing Base . . . . . . . . . . . 26
(g) Discretionary Rights . . . . . . . . . . . . . . . . 26
(h) Inventory Advances . . . . . . . . . . . . . . . . . 27
(i) Receivables Advances . . . . . . . . . . . . . . . . 27
(j) Unbilled Receivables . . . . . . . . . . . . . . . . 27
(k) Individual Revolving Advances. . . . . . . . . . . . 27
(l) . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.2 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.3 Procedure for Borrowing . . . . . . . . . . . . . . . . . . 28
2.4 Disbursement of Advance Proceeds. . . . . . . . . . . . . . 31
2.5 Repayment of Advances . . . . . . . . . . . . . . . . . . . 31
2.6 Repayment of Excess Advances. . . . . . . . . . . . . . . . 31
2.7 Manner of Borrowing and Payment . . . . . . . . . . . . . . 32
2.8 Statement of Account. . . . . . . . . . . . . . . . . . . . 33
2.9 No Deductions . . . . . . . . . . . . . . . . . . . . . . . 34
2.10 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . 34
2.11 Additional Payments . . . . . . . . . . . . . . . . . . . . 34
2.12 Increased Costs . . . . . . . . . . . . . . . . . . . . . . 35
2.13 Capital Adequacy. . . . . . . . . . . . . . . . . . . . . . 36
2.14 Basis For Determining Interest Rate Inadequate or Unfair. . 36
2.15 Letters of Credit . . . . . . . . . . . . . . . . . . . . . 37
2.16 Issuance of Letters of Credit . . . . . . . . . . . . . . . 38
2.17 Requirements For Issuance of Letters of Credit. . . . . . . 39
2.18 Defaulting Lender . . . . . . . . . . . . . . . . . . . . . 40
III. INTEREST AND FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.1 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.2 Intentionally Omitted . . . . . . . . . . . . . . . . . . . 42
3.3 Unused Facility Fee . . . . . . . . . . . . . . . . . . . . 42
3.4 Letter of Credit. . . . . . . . . . . . . . . . . . . . . . 42
3.5 Computation of Interest and Fees. . . . . . . . . . . . . . 43
3.6 Maximum Charges . . . . . . . . . . . . . . . . . . . . . . 43
IV. COLLATERAL: GENERAL TERMS. . . . . . . . . . . . . . . . . . . . . . . 43
4.1 Acknowledgement and Grant of Security Interests . . . . . . 43
4.2 Perfection of Security Interest . . . . . . . . . . . . . . 44
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4.3 Disposition of Collateral . . . . . . . . . . . . . . . . . 44
4.4 Preservation of Collateral. . . . . . . . . . . . . . . . . 44
4.5 Ownership of Collateral . . . . . . . . . . . . . . . . . . 45
4.6 Defense of Agent's Interests. . . . . . . . . . . . . . . . 45
4.7 Books and Records . . . . . . . . . . . . . . . . . . . . . 46
4.8 Financial Disclosure. . . . . . . . . . . . . . . . . . . . 46
4.9 Compliance with Laws. . . . . . . . . . . . . . . . . . . . 47
4.10 Inspection of Premises. . . . . . . . . . . . . . . . . . . 47
4.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.12 Failure to Maintain Insurance . . . . . . . . . . . . . . . 49
4.13 Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . 49
4.14 Payment of Leasehold Obligations. . . . . . . . . . . . . . 50
4.15 Receivables . . . . . . . . . . . . . . . . . . . . . . . . 50
(a) Nature of Receivables. . . . . . . . . . . . . . . . 50
(b) Solvency of Customers. . . . . . . . . . . . . . . . 50
(c) Locations of Borrower. . . . . . . . . . . . . . . . 50
(d) Collection of Receivables. . . . . . . . . . . . . . 50
(e) Notification of Assignment of Receivables. . . . . . 51
(f) Power of Agent to Act on Each Borrower's Behalf. . . 51
(g) No Liability . . . . . . . . . . . . . . . . . . . . 52
(h) Establishment of an Agency Account . . . . . . . . . 52
4.16 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.17 Exculpation of Liability. . . . . . . . . . . . . . . . . . 53
4.18 Environmental Matters . . . . . . . . . . . . . . . . . . . 53
V. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . 56
5.1 Authority . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.2 Formation and Qualification . . . . . . . . . . . . . . . . 56
5.3 Survival of Representations and Warranties. . . . . . . . . 56
5.4 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . 57
5.5 Financial Statements. . . . . . . . . . . . . . . . . . . . 57
5.6 Corporate Name. . . . . . . . . . . . . . . . . . . . . . . 58
5.7 O.S.H.A. and Environmental Compliance . . . . . . . . . . . 59
5.8 Solvency; No Litigation, Violation, Indebtedness or
Default . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.9 Patents, Trademarks, Copyrights and Licenses. . . . . . . . 60
5.10 Licenses and Permits. . . . . . . . . . . . . . . . . . . . 60
5.11 Default of Indebtedness . . . . . . . . . . . . . . . . . . 61
5.12 No Default. . . . . . . . . . . . . . . . . . . . . . . . . 61
5.13 No Burdensome Restrictions. . . . . . . . . . . . . . . . . 61
5.14 No Labor Disputes . . . . . . . . . . . . . . . . . . . . . 61
5.15 Margin Regulations. . . . . . . . . . . . . . . . . . . . . 61
5.16 Investment Company Act. . . . . . . . . . . . . . . . . . . 61
5.17 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . 61
5.18 Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.19 Other Loan Documents. . . . . . . . . . . . . . . . . . . . 62
5.20 Delivery of Purchase Agreement. . . . . . . . . . . . . . . 62
VI. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 62
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6.1 Payment of Fees . . . . . . . . . . . . . . . . . . . . . . 62
6.2 Conduct of Business and Maintenance of Existence and
Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.3 Violations. . . . . . . . . . . . . . . . . . . . . . . . . 63
6.4 Government Receivables. . . . . . . . . . . . . . . . . . . 63
6.5 Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . 63
6.6 Funded Debt to EBITDA . . . . . . . . . . . . . . . . . . . 63
6.7 Tangible Net Worth. . . . . . . . . . . . . . . . . . . . . 64
6.8 Hedging Agreements; Interest Rate Protection. . . . . . . . 64
6.9 Execution of Supplemental Instruments . . . . . . . . . . . 64
6.10 Payment of Indebtedness . . . . . . . . . . . . . . . . . . 64
6.11 Standards of Financial Statements . . . . . . . . . . . . . 65
6.12 Exercise of Rights. . . . . . . . . . . . . . . . . . . . . 65
6.13 Inventory Composition . . . . . . . . . . . . . . . . . . . 65
6.14 Interim Balance Sheet . . . . . . . . . . . . . . . . . . . 65
VII. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.1 Merger, Consolidation, Acquisition and Sale of Assets . . . 66
7.2 Creation of Liens . . . . . . . . . . . . . . . . . . . . . 66
7.3 Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . 66
7.4 Investments . . . . . . . . . . . . . . . . . . . . . . . . 66
7.5 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.6 Capital Expenditures. . . . . . . . . . . . . . . . . . . . 67
7.7 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.8 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . 68
7.9 Nature of Business. . . . . . . . . . . . . . . . . . . . . 68
7.10 Transactions with Affiliates. . . . . . . . . . . . . . . . 68
7.11 Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . 68
7.12 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . 69
7.13 Fiscal Year and Accounting Changes. . . . . . . . . . . . . 69
7.14 Prepayment of Indebtedness. . . . . . . . . . . . . . . . . 69
7.15 Pledge of Credit. . . . . . . . . . . . . . . . . . . . . . 69
VIII. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . 69
8.1 Conditions to Effectiveness . . . . . . . . . . . . . . . . 69
(a) Notes. . . . . . . . . . . . . . . . . . . . . . . . 69
(b) Filings, Registrations and Recordings. . . . . . . . 69
(c) Proceedings of the Borrowers . . . . . . . . . . . . 70
(d) Legal Opinions . . . . . . . . . . . . . . . . . . . 70
(e) No Litigation. . . . . . . . . . . . . . . . . . . . 70
(f) Senior Notes . . . . . . . . . . . . . . . . . . . . 70
(g) Pledge Agreements and Other Documents. . . . . . . . 70
(h) Fees . . . . . . . . . . . . . . . . . . . . . . . . 71
(i) Material Adverse Change. . . . . . . . . . . . . . . 71
(j) Representations and Warranties; Covenants; Events. . 71
(k) Incumbency Certificates of the Borrowers . . . . . . 71
(l) Certificates . . . . . . . . . . . . . . . . . . . . 71
(m) Good Standing Certificates . . . . . . . . . . . . . 71
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(n) Financial Condition Certificates . . . . . . . . . . 72
(o) Collateral Examination . . . . . . . . . . . . . . . 72
(p) Pro Forma Financial Statements . . . . . . . . . . . 72
(q) Undrawn Availability . . . . . . . . . . . . . . . . 72
(r) Insurance. . . . . . . . . . . . . . . . . . . . . . 72
(s) Payment Instructions . . . . . . . . . . . . . . . . 72
(t) Blocked Accounts . . . . . . . . . . . . . . . . . . 72
(u) Consents . . . . . . . . . . . . . . . . . . . . . . 72
(v) Leasehold Agreements . . . . . . . . . . . . . . . . 72
(w) Senior Notes . . . . . . . . . . . . . . . . . . . . 72
(x) Contract Review. . . . . . . . . . . . . . . . . . . 73
(y) Closing Certificate. . . . . . . . . . . . . . . . . 73
(z) Borrowing Base . . . . . . . . . . . . . . . . . . . 73
(aa) Other Agreements . . . . . . . . . . . . . . . . . . 73
(ab) Equity Offering. . . . . . . . . . . . . . . . . . . 73
(ac) Environmental Reports. . . . . . . . . . . . . . . . 73
(ad) Payment Instructions . . . . . . . . . . . . . . . . 73
(ae) Other. . . . . . . . . . . . . . . . . . . . . . . . 73
(af) Purchase Agreement . . . . . . . . . . . . . . . . . 73
8.2 Conditions to Each Advance. . . . . . . . . . . . . . . . . 74
(a) Representations and Warranties . . . . . . . . . . . 74
(b) No Default . . . . . . . . . . . . . . . . . . . . . 74
(c) Maximum Advances . . . . . . . . . . . . . . . . . . 74
IX. INFORMATION AS TO BORROWERS . . . . . . . . . . . . . . . . . . . . . . 74
9.1 Disclosure of Material Matters. . . . . . . . . . . . . . . 74
9.2 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.3 Environmental Reports . . . . . . . . . . . . . . . . . . . 75
9.4 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 75
9.5 Occurrence of Defaults, etc . . . . . . . . . . . . . . . . 76
9.6 Government Receivables. . . . . . . . . . . . . . . . . . . 76
9.7 Annual Financial Statements . . . . . . . . . . . . . . . . 76
9.8 Monthly Financial Statements. . . . . . . . . . . . . . . . 77
9.9 Other Reports . . . . . . . . . . . . . . . . . . . . . . . 77
9.10 Additional Information. . . . . . . . . . . . . . . . . . . 77
9.11 Business Plan . . . . . . . . . . . . . . . . . . . . . . . 78
9.12 Appraisals. . . . . . . . . . . . . . . . . . . . . . . . . 78
9.13 Power by the Hour Agreement . . . . . . . . . . . . . . . . 78
9.14 Additional Documents. . . . . . . . . . . . . . . . . . . . 78
X. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
XI. AGENT'S AND LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT. . . . . . . . . 80
11.1 Rights and Remedies . . . . . . . . . . . . . . . . . . . . 80
11.2 Agent's Discretion. . . . . . . . . . . . . . . . . . . . . 82
11.3 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.4 Rights and Remedies not Exclusive . . . . . . . . . . . . . 82
XII. WAIVERS AND JUDICIAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . 82
12.1 Waiver of Notice. . . . . . . . . . . . . . . . . . . . . . 82
12.2 Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
12.3 Jury Waiver . . . . . . . . . . . . . . . . . . . . . . . . 82
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XIII. EFFECTIVE DATE AND TERMINATION. . . . . . . . . . . . . . . . . . . . 83
13.1 Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
13.2 Termination . . . . . . . . . . . . . . . . . . . . . . . . 83
XIV. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
14.1 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 84
14.2 Entire Understanding and Amendments and Modifications . . . 84
14.3 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . 85
14.4 Successors and Assigns; Participations; New Lenders . . . . 86
14.5 Application of Payments . . . . . . . . . . . . . . . . . . 87
14.6 Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . 88
14.7 Survivability . . . . . . . . . . . . . . . . . . . . . . . 89
14.8 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 89
14.9 Injunctive Relief . . . . . . . . . . . . . . . . . . . . . 89
14.10 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . 90
14.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 90
14.12 Recordation . . . . . . . . . . . . . . . . . . . . . . . . 90
14.13 Consequential Damages . . . . . . . . . . . . . . . . . . . 90
14.14 Construction. . . . . . . . . . . . . . . . . . . . . . . . 90
XV. BORROWING AGENCY. . . . . . . . . . . . . . . . . . . . . . . . . . 90
15.1. Borrowing Agency Provisions . . . . . . . . . . . . . . . . 90
15.2. Waiver of Subrogation . . . . . . . . . . . . . . . . . . . 91
XVI. REGARDING AGENT.. . . . . . . . . . . . . . . . . . . . . . . . . . 91
16.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . 91
16.2. Nature of Duties. . . . . . . . . . . . . . . . . . . . . . 92
16.3. Lack of Reliance on Agent and Resignation . . . . . . . . . 92
16.4. Certain Rights of Agent . . . . . . . . . . . . . . . . . . 93
16.5. Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . 93
16.6. Notice of Default . . . . . . . . . . . . . . . . . . . . . 93
16.7. Indemnification . . . . . . . . . . . . . . . . . . . . . . 94
16.8. Agent in its Individual Capacity. . . . . . . . . . . . . . 94
16.9. Delivery of Documents . . . . . . . . . . . . . . . . . . . 94
16.10. Borrowers' Undertaking to Agent . . . . . . . . . . . . . . 94
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EXHIBITS AND SCHEDULES
EXHIBITS
1.2(a) CIT Loan Documents
1.2(b) Permitted Liens
1.2(c) World Loan Documents
2.2 Notes
2.15 Letter of Credit Agreement
4.5 Inventory Locations
5.2 States of Incorporation and Qualification To Do Business
5.5(c) Cash Flow Projections and Balance Sheets
5.7 Environmental Compliance
5.8(b) Pending Litigation
5.9 Patents, Tradenames, Copyrights and Licenses
5.10 Licenses and Permits
5.12 Defaults
5.14 Labor Disputes and Contracts
7.3 Guarantees
8.1(r) Financial Condition Opinion
9.2 Borrowing Base Certificate
SCHEDULES
1.2 Real Property
FOURTH AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT
Fourth Amended and Restated Revolving Credit and Security Agreement dated
as of June ___, 1996 among GREENWICH AIR SERVICES, INC., a corporation organized
under the laws of the State of Delaware ("Greenwich"), GAS TURBINE CORPORATION,
a corporation organized under the laws of the State of Delaware, and a wholly-
owned subsidiary of Greenwich ("Turbine"), GREENWICH TURBINE, INC., a
corporation organized under the laws of the State of Delaware ("GTI") GASI
ENGINE SERVICES CORPORATION, a corporation organized under the laws of the state
of Delaware ("GASI"), MCALLEN COMPONENTS, L.P., a limited partnership organized
under the laws of the State of Delaware ("Components"), GREENWICH AIR SERVICES -
TEXAS, L.P., a limited partnership organized under the laws of the state of
Delaware ("Engine Services") (each, a "Borrower" and jointly and severally,
"Borrowers"), the undersigned financial institutions and the various financial
institutions that become Lenders hereunder (each a "Lender" and collectively,
"Lenders") and THE BANK OF NEW YORK COMMERCIAL CORPORATION ("BNYCC"), a
corporation organized under the laws of the State of New York as agent for
Lenders (BNYCC in such capacity, "Agent").
B A C K G R O U N D
Greenwich, Turbine, GTI and BNYCC entered into a Third Amended and
Restated Revolving Credit, Term Loan and Security Agreement dated as of March
14, 1995 (as same may have been amended, modified or supplemented, the "Existing
Loan Agreement"). BNYCC, pursuant to an Assignment dated as of June ___, 1996,
has assigned all of its rights and obligations under the Existing Loan Agreement
to Agent and Lenders. By execution of this Agreement, Borrowers, Agent and
Lenders wish to add certain entities as Borrowers and to amend and restate the
Existing Loan Agreement on the terms and conditions hereinafter set forth.
IN CONSIDERATION of the mutual covenants and undertakings herein
contained, the parties hereto hereby agree as follows:
I. DEFINITIONS.
1.1 ACCOUNTING TERMS. As used in this Agreement, the Notes, or any
certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in Section 1.2 or elsewhere in this
Agreement and accounting terms partly defined in Section 1.2 to the extent not
defined, shall have the respective meanings given to them under GAAP.
1.2 GENERAL TERMS. For purposes of this Agreement the following terms
shall have the following meanings:
"ACQUISITION AGREEMENT" shall mean the Agreement of Purchase and Sale by
and among Greenwich, Turbine (formerly known
as GTC East Granby Corporation) and Chromalloy dated March 21, 1994.
"ADVANCE RATES" shall mean the Greenwich Advance Rates, Turbine Advance
Rates, GTI Advance Rates, GASI Advance Rates and the Engine Services Advance
Rates.
"ADVANCE REQUEST" shall mean the meaning set forth in Section 2.3.
"ADVANCES" shall mean all Revolving Advances, and other financial
accommodations provided by Lenders to Borrowers under or in connection with this
Agreement including, without limitation, Letters of Credit to the extent of the
undrawn amount outstanding of such Letters of Credit.
"AFFILIATE" of any Person shall mean (a) any Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with such Person, or (b) any Person who is a director
or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of
any Person described in clause (a) above. For purposes of this definition,
control of a Person shall mean the power, direct or indirect, (x) to vote 10% or
more of the securities having ordinary voting power for the election of
directors of such Person, or (y) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"AGENCY ACCOUNT" shall have the meaning set forth in Section 4.15(h).
"AGENT" shall have the meaning set forth in the preamble to this
Agreement and shall include its successors and assigns.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal to
the higher of (i) the Prime Rate in effect on such day and (ii) the Federal
Funds Rate in effect on such day plus 1/2 of 1%.
"APPLICABLE MARGIN" shall mean initially (a) with respect to Domestic
Loans, 7/8% and (b) with respect to Eurodollar Rate Loans, 2 3/8%, PROVIDED,
HOWEVER, the Applicable Margin shall be amended as provided below, commencing on
the later to occur of (i) the last day of the third fiscal quarter after the
Effective Date and (ii) March 31, 1997 and at the end of each fiscal quarter
thereafter based upon the ratio of Funded Debt to EBITDA as reflected in the
financial statements (x) delivered to Agent pursuant to Section 9.7 of this
Agreement with respect to the first three (3) fiscal quarters of any fiscal year
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and (b) delivered to Agent pursuant to Section 9.8 of this Agreement with
respect to the last fiscal quarter of any fiscal year:
Applicable Margin
Ratio of Funded Debt Alternate
to EBITDA LIBOR Base Rate
- --------------------------------------------------------------------------------
less than 3.0 to 1.0 2.00% 0.50%
less than 3.50 and equal to or greater than 3.0 to 1.0 2.125% 0.625%
less than 4.50 and equal to or greater than 3.50 to 1.0 2.375% 0.875%
equal to or greater than 4.50 to 1.0 2.625% 1.125%
Notwithstanding the foregoing, the Applicable Margin shall not be reduced at
such time as an Event of Default or Incipient Event of Default has occurred and
is continuing but shall be reduced (if applicable) when such Event of Default or
Incipient Event of Default has been waived or cured. The foregoing ratio shall
be determined for Borrowers on a consolidated basis.
"AUTHORITY" shall have the meaning set forth in Section 4.18(d).
"AVIALL" shall mean collectively, Aviall Services, Inc. and Aviall, Inc.
"AVIALL POWER BY THE HOUR AGREEMENTS" shall mean
________________________.
"BANK" shall mean The Bank of New York.
"BNYCC" shall have the meaning set forth in the introductory paragraph
hereof.
"BORROWERS" shall mean, jointly and severally, Greenwich, Turbine, GTI,
GASI, Components, Engine Services and all permitted successors and assigns.
"BUSINESS DAY" shall mean with respect to Eurodollar Rate Loans, any day
on which commercial banks are open for domestic and international business,
including dealings in dollar deposits in London, England and New York, New York
and with respect to Domestic Rate Loans, any day other than a day on which
commercial banks in New York are authorized or required by law to close.
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"BUSINESS PLAN" shall mean the long range business and strategic plan of
Borrowers which shall include monthly forecasts for (a) the fiscal year ending
September 30, 1997 and (b) each fiscal year thereafter, each of which shall be
in form and substance consistent with past practices.
"CALEDONIAN" shall mean Greenwich Caledonian, Limited, a company
organized and existing under the laws of [Scotland].
"CALEDONIAN CREDIT AGREEMENT" shall mean __________________________.
"CAPITAL STOCK" shall have the meaning given to it in the Indenture.
"CAPITALIZED LEASE" means as to any Person, any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 ET
SEQ.
"CHANGE OF CONTROL" shall mean (a) with respect to Turbine, GTI, GASI,
Components and/or Engine Services, the occurrence of any event (whether in one
or more transactions) that results in a transfer of control of such Borrower to
a Person other than its respective Parent and (b) with respect to Greenwich, if
(i) (a) the Specified Holders cease in the aggregate to "beneficially own" (as
such term is used in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, at least 50% of the total voting power of the Voting Stock of
Greenwich, whether as a result of any issuance of securities of Greenwich, any
merger, consolidation, liquidation or dissolution of Greenwich or otherwise, and
(b) any "person" (within the meaning of Sections 13(d)(3) and 14(d)(2) of the
Exchange Act or any successor provision to either of the foregoing, including
any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other
than an underwriter engaged in a firm commitment underwriting on behalf of
Greenwich and other than the Specified Holders, becomes the "beneficial owner"
(as defined in clause (a) above, except that for the purposes of this clause (b)
a person other than a Specified Holder shall be deemed to have beneficial
ownership of all shares that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of either (x) 35% or more of the total voting power of the Voting
Stock of Greenwich or (y) a greater percentage of the total voting power of the
Voting Stock of Greenwich than the Specified Holders in the aggregate
"beneficially owned" (as defined in clause (a) above) directly or indirectly;,
(ii) the stockholders of Greenwich shall have approved any plan of liquidation
or dissolution of Greenwich; or (iii) during any period of two consecutive
years, individuals who at the beginning of such
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period constituted Greenwich's board of directors (together with any new
directors whose election or appointment by such board or whose nomination for
election by the stockholders of Greenwich was approved by a vote of at least 66-
2/3% of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of
Greenwich's board of directors then in office.
"CHARGES" shall mean all taxes, charges, fees, imposts, levies or other
assessments, including, without limitation, all net income, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation and property taxes,
custom duties, fees, assessments, Liens, Claims and charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts, imposed by any taxing or other governmental authority,
domestic or foreign (including, without limitation, the Pension Benefit Guaranty
Corporation or any environmental agency or superfund), upon the Collateral, any
Borrower or any of their Affiliates.
"CIT" shall mean The CIT Group/Equipment Financing, Inc., a New York
corporation.
"CIT LOAN DOCUMENTS" shall mean the Loan and Security Agreement and other
documents, dated as of November 5, 1992, as amended through the Effective Date,
between or among CIT, Greenwich, GCL, World and certain Affiliates of Borrowers,
all of which are listed on EXHIBIT 1.2(a) hereto; true and complete copies of
which have been furnished to Agent.
"CLAIMS" shall mean all security interests, Liens, claims or encumbrances
held or asserted by any Person against any or all of the Collateral, other than
(A) Charges and (B) Permitted Encumbrances.
"COLLATERAL" shall mean and include
(a) all Receivables;
(b) all Inventory;
(c) all of each Borrower's right, title and interest in and to
(i) its respective goods and other property including, but not limited to all
merchandise returned or rejected by Customers, relating to or securing any of
the Receivables; (ii) all of such Borrower's rights as a consignor, a consignee,
an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in
transit, set off, detinue, replevin, reclamation and repurchase; (iii) all
additional amounts due to any Borrower from
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any Customer relating to the Receivables; (iv) other property, including
warranty claims, relating to any goods securing this Agreement; (v) if and when
obtained by any Borrower, all real and personal property of third parties in
which such Borrower has been granted a lien or security interest as security for
the payment or enforcement of receivables; and (vi) any other goods, personal
property or real property now owned or hereafter acquired in which any Borrower
has expressly granted a security interest or may in the future grant a security
interest to Agent hereunder, or in any amendment or supplement hereto, or under
any other agreement between Agent and each Borrower;
(d) all of each Borrower's ledger sheets, ledger cards, files,
correspondence, records, books of account, business papers, computer software
(owned by any Borrower or in which it has an interest to the extent of such
interest), computer programs, tapes, disks and documents relating to (a), (b) or
(c) of this Paragraph; and
(e) all proceeds and products of (a), (b), (c) and (d) in
whatever form, including, but not limited to cash, deposit accounts (whether
or not comprised solely of proceeds), certificates of deposit, insurance
proceeds (including hazard, flood and credit insurance), negotiable instruments
and other instruments for the payment of money, chattel paper, security
agreements or documents.
"COMMITMENT PERCENTAGE" of any Lender shall mean the percentage set forth
below such Lender's name on the signature page hereof as same may be adjusted
upon any assignment by a Lender pursuant to Section 14.4(c) hereof.
"COMPONENTS" shall have the meaning set forth in the introductory
paragraph hereof.
"COMPONENTS ADVANCE RATES" shall have the meaning set forth in Section
2.1(d)(ii) hereof.
"COMPONENTS FORMULA AMOUNT" shall have the meaning set forth in Section
2.1(d) hereof.
"COMPONENTS INVENTORY ADVANCE RATE" shall have the meaning set forth in
Section 2.1(d)(ii) hereof.
"COMPONENTS RECEIVABLES ADVANCE RATE" shall have the meaning set forth in
Section 2.1(d)(i) hereof.
"CONESE FAMILY" shall have the meaning given to it in the Indenture.
"CONTINENTAL" shall have the meaning set forth in the definition of
Eligible Receivables.
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"CONTINENTAL INTERCREDITOR AGREEMENT" shall mean the Intercreditor and
Subordination Agreement between BNYCC and Continental dated as of May 1, 1995.
"CURRENT ASSETS" at a particular date, shall mean all cash, cash
equivalents, accounts and inventory of Borrowers on a consolidated basis and all
other items which would, in conformity with GAAP, be included under current
assets on a balance sheet of Borrowers on a consolidated basis as at such date;
PROVIDED, HOWEVER, that such amounts shall not include (a) any amounts for any
Indebtedness owing by an Affiliate to any Borrower, unless such Indebtedness
arose in connection with the sale of goods or rendition of services in the
ordinary course of business and would otherwise constitute current assets in
conformity with GAAP, (b) any shares of stock issued by an Affiliate of either
Borrower, or (c) the cash surrender value of any life insurance policy. In
addition, Current Assets shall include (i) gas turbine engines and rotable parts
even if recorded as property, plant and equipment by any Borrower in its
respective books and records for accounting purposes and (ii) Customer Deposits
as a contra-asset.
"CURRENT LIABILITIES" at a particular date, shall mean all amounts which
would, in conformity with GAAP, be included under current liabilities on a
balance sheet of Borrowers on a consolidated basis, as at such date, but in any
event including, without limitation, the amounts of (a) all Indebtedness of
Borrowers on a consolidated basis payable on demand, or, at the option of the
Person to whom such Indebtedness is owed, not more than twelve (12) months after
such date, (b) any payments in respect of any Indebtedness of any Borrower
(whether installment, serial maturity, sinking fund payment or otherwise)
required to be made not more than twelve (12) months after such date, (c) all
reserves in respect of liabilities or Indebtedness payable on demand or, at the
option of the Person to whom such Indebtedness is owed, not more than twelve
(12) months after such date and (d) all accruals for federal or other taxes
measured by income payable within a twelve (12) month period. Current
Liabilities shall exclude Customer Deposits.
"CUSTOMER" shall mean and include the account debtor with respect to any
of the Receivables.
"CUSTOMER DEPOSITS" shall mean cash deposits or advance payments and
progress payments received from Customers of the Borrower.
"DEFAULTING LENDER" shall have the meaning set forth in Section 2.18(a)
hereof.
"DEFAULT RATE" shall have the meaning set forth in Section 3.1 hereof.
"DOCUMENT" shall have the meaning set forth in Section 8.1(c) hereof.
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"DOLLAR" and the sign "$" shall mean lawful money of the United States of
America.
"DOMESTIC RATE LOAN" shall mean any Advance that bears interest based
upon the Alternate Base Rate.
"EBITDA" for any period, shall mean for Borrowers on a consolidated basis
(a) Net Income for such period, PLUS (b) interest and taxes for such period,
PLUS (c) the sum of depreciation and amortization for such period.
"EFFECTIVE DATE" shall mean June __, 1996 or such other later date as the
conditions precedent set forth in Article VIII shall have been satisfied.
"EFFECTIVE HOURS ADJUSTMENT" shall have the meaning set forth in the
definition of Eligible Receivables.
"ELIGIBLE INVENTORY" shall mean and include with respect to all Borrowers
Inventory valued at book value, determined by a moving average method consistent
with the method in effect on the Initial Closing Date, which is consistent with
Greenwich's past practices for write-offs, write downs or reserves for old,
non-serviceable, non-repairable, obsolete, slow moving or unmerchantable
Inventory and which Agent, in its reasonable discretion, shall not deem
ineligible Inventory, based on such considerations as Agent may from time to
time deem appropriate including, without limitation, whether the Inventory is
subject to a perfected, first priority security interest in favor of Agent and
whether the Inventory conforms to all standards imposed by any governmental
agency, division or department thereof which has regulatory authority over such
goods or the use or sale thereof. Notwithstanding anything to the contrary
contained herein, in the event that the aggregate amount of "repairable"
Inventory (as defined in Section 6.13 hereof) ("Total Repairable Inventory")
exceeds 20% of total Inventory, repairable Inventory in an amount equal to the
difference between (a) Total Repairable Inventory MINUS (b) 20% of total
Inventory shall be excluded from Eligible Inventory. The preceding sentence
shall not constitute a waiver of any breach of Section 6.13(c) hereof.
"ELIGIBLE RECEIVABLES" shall mean and include with respect to any
Borrower each Receivable of such Borrower arising in the ordinary course of such
Borrower's business and which Agent, in its reasonable credit judgment (but
subject to the limitations set forth below), shall deem to be an Eligible
Receivable, based on such considerations as Agent may from time to time deem
appropriate. Specifically, a Receivable shall not be deemed eligible unless
such Receivable is subject to Agent's perfected security interest and no other
Lien other than Permitted Encumbrances, and is evidenced by an invoice or other
documentary
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evidence satisfactory to Agent. In addition, a Receivable shall not be an
Eligible Receivable if:
(a) it arises out of a sale made by such Borrower to an
Affiliate of such Borrower or to a Person controlled by an Affiliate of such
Borrower and such Receivable when added to the existing Receivables from
Affiliates causes the aggregate amount of outstanding Receivables from
Affiliates of such Borrower to be greater than $250,000; PROVIDED, HOWEVER, in
no event shall a Receivable due from one Borrower to another Borrower constitute
an Eligible Receivable;
(b) it is due or unpaid more than one hundred twenty (120) days
after the original invoice date except Receivables from (i) Affiliates which
shall be due or unpaid more than thirty (30) days after the original invoice
date and (ii) Continental ("Continental Receivables") which shall be due or
unpaid more than ninety (90) days after the original invoice date;
(c) thirty-five percent (35%) or more of the Receivables from
the subject Customer are due or unpaid more than one hundred twenty (120) days
after the original invoice date;
(d) any covenant, representation or warranty contained in this
Agreement with respect to such Receivable has been breached in any material
respect;
(e) the Customer is also such Borrower's creditor or supplier
for an amount in excess of $100,000, or the Customer has disputed liability, or
the Customer has made any claim with respect to any other Receivable due from
such Customer to such Borrower, or the Receivable otherwise is or may become
subject to any right of set off by the Customer; PROVIDED, HOWEVER, the portion
of such Receivable that would otherwise be deemed an Eligible Receivable and
which is not subject to dispute or set-off shall be an Eligible Receivable;
(f) the Customer has commenced a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or made an
assignment for the benefit of creditors, or if a decree or order for relief has
been entered by a court having jurisdiction in the premises in respect of the
Customer in an involuntary case under any state or federal bankruptcy laws, as
now constituted or hereafter amended, or if any other petition or other
application for relief under any state or federal bankruptcy law has been filed
against the Customer, or if the Customer has discontinued its business, ceased
to be solvent, or consented to or suffered a receiver, trustee, liquidator or
custodian to be appointed for it or for all or a significant portion of its
assets or affairs;
(g) the sale is to a Customer outside the United States or
Canada, unless the sale is on letter of credit, guaranty or acceptance terms
(and all proceeds thereunder have been
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assigned to Agent for benefit of Lenders) or Borrowers' maintain credit
insurance with respect thereto with type of coverage and limit levels acceptable
to Agent, or unless such Borrower shall have retained in its possession the
goods giving rise to such Receivable as collateral for such Receivable and such
goods shall have a market value in excess of the face amount of the Receivable,
in any such case acceptable to Agent in its reasonable discretion;
(h) the sale to the Customer is on a bill-and-hold basis
(except where (i) the Customer has manifested its approval, in writing, to the
acceptable quality of the services rendered, goods to be delivered and its
approval of such sale or (ii) the goods to be delivered have passed all tests
required pursuant to the contract therefor), guaranteed sale, sale-and-return,
sale on approval, consignment or any other repurchase or return basis or is
evidenced by chattel paper;
(i) Agent believes, in its reasonable judgment, that collection
of such Receivable is insecure or that such Receivable may not be paid by reason
of the Customer's financial inability to pay unless, in either case, such
Borrower shall have retained in its possession the goods giving rise to such
Receivable as collateral for such Receivable and such goods shall have a market
value in excess of the face amount of the Receivable, in any such case
acceptable to Agent in its reasonable discretion;
(j) the Customer is the United States of America, any state or
any department, agency or instrumentality of any of them, unless such Borrower
assigns its right to payment of such Receivable to Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 ET SEQ.
and 41 U.S.C., Sub-Section 15) or has otherwise complied with other applicable
statutes or ordinances;
[(k) the services giving rise to such Receivable have not been
performed by such Borrower or the Receivable is an advance or progress billing
or otherwise does not represent a final sale or performance;]
(l) the aggregate Receivables owed by the subject Customer
exceed a credit limit for such Customer as same may be determined in good faith
by Agent, in the exercise of its discretion in a reasonable manner, but only to
the extent that the aggregate Receivables owed by such Customer exceeds such
limit;
(m) the Receivable is subject to any pending or asserted
offset, deduction, defense, dispute, or counterclaim (excluding claims by
Customers with respect to their respective Customer Deposits for services not
yet performed in an amount less than $150,000) or if the Receivable is
contingent in any respect or for any reason; PROVIDED, HOWEVER, the portion of
each Receivable that would otherwise be deemed an Eligible Receivable and which
is not subject to offset, deduction, defense, dispute, counterclaim or
contingency shall be an Eligible Receivable;
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(n) Such Borrower has made any agreement with the subject
Customer for any deduction therefrom, except for discounts or allowances made in
the ordinary course of business for prompt payment, all of which discounts or
allowances are reflected on the face of each respective invoice related thereto;
PROVIDED, HOWEVER, the portion of such Receivable that would otherwise be deemed
an Eligible Receivable and which is not subject to deduction, discount or
allowance shall be an Eligible Receivable;
(o) the rendition of services has not been completed or all
supporting documentation has not been placed in the Customer file;
(p) any return, rejection or repossession of any underlying
merchandise has occurred;
(q) such Receivable is not payable to such Borrower; or
(r) such Receivable is not otherwise satisfactory to the Agent
as determined in good faith by Agent in the exercise of its discretion in a
reasonable manner.
Notwithstanding anything to the contrary, Receivables arising under the
Greenwich Power by the Hour Agreement for any two consecutive months consisting
of the then current month and one additional month, shall be deemed Eligible
Receivables only if (i) no Event of Default shall have occurred and be
continuing, (ii) Greenwich shall have an "accrued receivable" on its books with
respect to the Greenwich Power by the Hour Agreement, (iii) the amount of such
Receivables shall not exceed the adjustment with respect to "Effective Hours"
("Effective Hours Adjustment") as of the end of the immediately preceding month
calculated pursuant to Section 10 of the Greenwich Power by the Hour Agreement
and (iv) Agent believes, in the good faith exercise of its reasonable judgment,
that the collection of such Receivable is secure and that the aggregate
Receivables owed by the Customer do not exceed a credit limit determined in good
faith by Agent.
[INSERT PROVISIONS RE AVIALL POWER BY HOUR AGREEMENTS]
"ELIGIBLE UNBILLED RECEIVABLES" shall mean Receivables of Engine
Services, Components and/or GASI which, but for the fact invoices for payment
have not yet been sent to Customers, would constitute Eligible Receivables
hereunder.
"ENGINE SERVICES" shall have the meaning set forth in the introductory
paragraph hereof.
"ENGINE SERVICES ADVANCE RATES" shall have the meaning set forth in
Section 2.1(f)(ii)
"ENGINE SERVICES FORMULA AMOUNT" shall have the meaning set forth in
Section 2.1(f) hereof.
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"ENGINE SERVICES INVENTORY ADVANCE RATE" shall have the meaning set forth
in Section 2.1(f)(ii) hereof.
"ENGINE SERVICES RECEIVABLES ADVANCE RATE" shall have the meaning set
forth in Section 2.1(f)(i) hereof.
"ENVIRONMENTAL COMPLAINT" shall have the meaning set forth in Section
4.18(d) hereof.
"ENVIRONMENTAL LAWS" shall mean all federal, state and local
environmental, land use, zoning, health, chemical use, safety and sanitation
laws, statutes, ordinances and codes relating to the protection of the
environment and/or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of federal, state and local governmental
agencies and authorities with respect thereto.
"EQUIPMENT" shall have the meaning set forth in the CIT Loan Documents.
"EURODOLLAR RATE" shall mean for any Eurodollar Rate Loan, for the then
current Interest Period relating thereto, the rate per annum (such Eurodollar
Rate to be adjusted to the next higher 1/100 of one (1%) percent) equal to the
quotient of (a) LIBOR, divided by (b) a number equal to 1.00 minus the aggregate
of the rates (expressed as a decimal) of reserve requirements current on the day
that is three Business Days prior to the beginning of the Interest Period
(including without limitation basic, supplemental, marginal and emergency
reserves) under any regulation promulgated by the Board of Governors of the
Federal Reserve System (or any other governmental authority having jurisdiction
of the Bank) as in effect from time to time, dealing with reserve requirements
prescribed for Eurocurrency funding including any reserve requirements with
respect to "Eurocurrency liabilities" under Regulation D of the Board of
Governors of the Federal Reserve System.
"EURODOLLAR RATE LOAN" shall mean an Advance at any time that bears
interest based on the Eurodollar Rate.
"EVENT OF DEFAULT" shall mean the occurrence and continuance of any of
the events set forth in Article X hereof.
"EXCHANGE ACT" shall have the meaning given to it in the Indenture.
"FEDERAL FUNDS RATE" shall mean, for any day, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so
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published for any day which is a Business Day, the average of quotations for
such day on such transactions received by the Bank from three Federal funds
brokers of recognized standing selected by the Bank.
"FEE LETTER" shall mean _________________________.
"FIXED CHARGE COVERAGE RATIO", with respect to any fiscal period, shall
mean the ratio of (a) EBITDA for such period MINUS capital expenditures for
Borrowers on a consolidated basis for such period PLUS purchase money
indebtedness related to capital expenditures for such period to (b) the sum of
(i) all cash expended by Borrowers on a consolidated basis to make interest and
scheduled principal payments on Indebtedness (including, without limitation,
Capitalized Leases) PLUS (ii) income taxes PLUS (iii) cash dividends paid.
"FORMULA AMOUNT" shall mean the sum of the Greenwich Formula Amount, the
Turbine Formula Amount, the GTI Formula Amount, the GASI Formula Amount, the
Components Formula Amount and the Engine Services Formula Amount.
"FUNDING DATE" shall have the meaning set forth in Section 2.7(f) hereof.
"FUNDED DEBT" shall mean, with respect to Borrowers on a consolidated
basis, (i) liabilities for borrowed money and (ii) obligations under leases
which are or are required to be shown in accordance with GAAP as a liability on
a balance sheet of the lessee thereunder.
"GAAP" shall mean generally accepted accounting principles in the United
States of America in effect from time to time consistently applied.
"GASI" shall have the meaning set forth in the introductory paragraph
hereof.
"GASI ADVANCE RATES" shall have the meaning set forth in Section
2.1(e)(ii)
"GASI FORMULA AMOUNT" shall have the meaning set forth in Section 2.1(e)
hereof.
"GASI INVENTORY ADVANCE RATE" shall have the meaning set forth in Section
2.1(e)(ii) hereof.
"GASI RECEIVABLE ADVANCE RATE" shall have the meaning set forth in
Section 2.1(e)(i) hereof.
"GREENWICH" shall have the meaning set forth in the introductory
paragraph hereof.
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"GREENWICH ADVANCE RATES" shall have the meaning set forth in Section
2.1(a)(ii) hereof.
"GREENWICH FORMULA AMOUNT" shall have the meaning set forth in Section
2.1(a) hereof.
"GREENWICH INVENTORY ADVANCE RATE" shall have the meaning set forth in
Section 2.1(a)(ii) hereof.
"GREENWICH POWER BY THE HOUR AGREEMENT" shall mean the Block Hour GASI
Maintenance Agreement between Greenwich and Burlington Air Express U.S.A., Inc.
dated September 8, 1989, for the repair and overhaul of Pratt & Whitney JT3 gas
turbine aircraft engines.
"GREENWICH RECEIVABLES ADVANCE RATE" shall have the meaning set forth in
Section 2.1(a)(i) hereof.
"GTI" shall have the meaning set forth in the introductory paragraph
hereof.
"GTI ADVANCE RATES" shall have the meaning set forth in Section
2.1(c)(ii) hereof.
"GTI FORMULA AMOUNT" shall have the meaning set forth in Section 2.1(c)
hereof.
"GTI INVENTORY ADVANCE RATE" shall have the meaning set forth in Section
2.1(c) hereof.
"GTI RECEIVABLES ADVANCE RATE" shall have the meaning set forth in
Section 2.1(c)(i) hereof.
"HAZARDOUS DISCHARGE" shall have the meaning set forth in Section 4.18(d)
hereof.
"HAZARDOUS SUBSTANCE" shall mean, without limitation, any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, hazardous wastes, hazardous or toxic substances or
related materials as defined in CERCLA, the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Sections 1801, ET SEQ.), or any other applicable
Environmental Law and in the regulations adopted pursuant thereto.
"HAZARDOUS WASTES" includes all waste materials subject to regulation
under CERCLA, RCRA or applicable state law, and any other applicable Federal and
state laws now in force or hereafter enacted relating to hazardous waste
disposal.
"HEDGING AGREEMENTS" any agreement entered into, from time to time, by
Borrowers and any one of the Lenders or a bank or
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financial institution reasonably acceptable to Agent to protect Borrower against
fluctuations in foreign currency exchange rates.
"INCIPIENT EVENT OF DEFAULT" shall mean an event which, with the giving
of notice or passage of time or both, would constitute an Event of Default.
"INDEBTEDNESS" of a Person at a particular date shall mean all
obligations of such Person which in accordance with GAAP would be classified
upon a balance sheet as liabilities (except Customer Deposits, Subordinated
Debt, capital stock and surplus earned or otherwise).
"INDENTURE" shall mean that certain Indenture, dated as of June __, 1996
from Greenwich and the Subsidiary Guarantors to American Stock Transfer & Trust
Company (as trustee) ("Trustee").
"INITIAL CLOSING DATE" shall mean July 6, 1990.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor Agreement, dated
November 5, 1992 among CIT, BNYCC, World and Greenwich, as same has been
amended, modified and supplemented from time to time.
"INTEREST PERIOD" shall mean the period provided for any Eurodollar Rate
Loan pursuant to Section 2.3(b) hereof.
"INTEREST RESERVE" shall mean at any time following an Event of Default
and for so long as such Event of Default shall be continuing without waiver or
cure an amount equal to the regularly scheduled interest payments under the CIT
Loan Documents and the Turbine Term Loan Documents for the next succeeding five
(5) month period.
"INVENTORY" shall mean and include, as to each Borrower, all of such
Borrower's now owned or hereafter acquired goods, merchandise and other personal
property, wherever located, to be furnished under any contract of service or
held for sale or lease, all raw materials, work in process, finished goods and
materials and supplies of any kind, nature or description which are or might be
used or consumed in such Borrower's business or used in selling or furnishing
such goods, merchandise and other personal property, and all documents of title
or other documents representing them. In addition, Inventory shall include gas
turbine engines and rotable parts even if recorded as property, plant and
equipment by Borrowers for accounting purposes.
"INVENTORY ADVANCE RATE" shall singularly or collectively, the Greenwich
Inventory Advance Rate, Turbine Inventory Advance Rate, GTI Inventory Advance
Rate, Components Inventory Advance Rate, GASI Inventory Advance Rate and Engine
Services Inventory Advance Rate.
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"INVENTORY PURCHASE AGREEMENT" shall mean the Inventory Purchase
Agreement dated as of May 1, 1995 between Greenwich and Continental.
"LENDER" or "LENDERS" shall have the meaning set forth in the
introductory paragraph hereof.
"LENDER DEFAULT" shall have the meaning set forth in Section 2.18(a)
hereof.
"LETTER OF CREDIT FEES" shall have the meaning set forth in Section 3.4.
"LETTERS OF CREDIT" shall have the meaning set forth in Section 2.15.
"LIBOR" shall mean for any Eurodollar Rate Loan for the then current
Interest Period relating thereto, the rate per annum quoted by the Bank in 1/16
increments, if available, two (2) Business Days prior to the first day of such
Interest Period for the offering by the Bank to prime commercial banks in the
London interbank Eurodollar market of dollar deposits in immediately available
funds for a period equal to such Interest Period and in an amount equal to the
amount of such Eurodollar Rate Loan.
"LIEN" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien, Charge, Claim or encumbrance, or
preference, priority or other security agreement or preferential arrangement in
respect of any asset of any Borrower of any kind or nature whatsoever including,
without limitation, any conditional sale or other title retention agreement, any
lease having substantially the same economic effect as any of the foregoing, and
the filing of, or agreement to give, any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction.
"MAXIMUM LOAN AMOUNT" at any date shall mean $175,000,000 less such
amounts as shall be due and owing by Caledonian to Agent [and the Lenders] under
the Caledonian Credit Agreement.
"MONTHLY ADVANCES" shall have the meaning set forth in Section 3.1
hereof.
"NET INCOME" for any period shall mean the net income of Borrowers on a
consolidated basis for such period as determined in accordance with GAAP.
"NET WORTH" at a particular date, shall mean all amounts which would be
included under shareholders' equity on a balance sheet of the Borrowers on a
consolidated basis determined in accordance with GAAP.
"NON-DEFAULTING LENDERS" shall have the meaning set forth in Section
2.18(b) hereof.
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"NOTES" shall mean the promissory notes referred to in Section 2.2
hereof.
"OBLIGATIONS" shall mean and include any and all of each Borrower's
Indebtedness and/or liabilities to Agent or Lenders of every kind, nature and
description, direct or indirect, secured or unsecured, joint, several, joint and
several, absolute or contingent, due or to become due, now existing or hereafter
arising, contractual or tortious, liquidated or unliquidated, under this
Agreement and the U.K. Guaranties and all obligations of any Borrower to Agent
or Lenders to perform acts or refrain from taking any action under this
Agreement.
"OTHER DOCUMENTS" shall mean any and all agreements, instruments and
documents, including, without limitation, guaranties, pledges, powers of
attorney, consents, and all other writings heretofore, now or hereafter executed
by any Borrower and/or delivered to Agent or any Lender in respect of the
transactions contemplated by this Agreement.
"PARENT" (a) of Turbine, GTI and Engine shall mean Greenwich, (b) of
GASI, Components and Engine Services shall mean Engine (as general partner in
the case of Components and Engine Services) and (c) of any other Person shall
mean a corporation or other entity owning, directly or indirectly, at least 50%
of the shares of stock or other ownership interests having ordinary voting power
to elect a majority of the directors of the Person, or other Persons performing
similar functions for any such Person.
"PARTICIPANT" shall mean each Person who shall be granted the right by
any Lender to participate in any of the Advances and who shall have entered into
a participation agreement in respect thereof in form and substance satisfactory
to such Lender.
"PAYMENT OFFICE" shall mean initially 1290 Avenue of the Americas, New
York, New York 10104; thereafter, such other office of Agent, if any, which it
may designate by notice to Greenwich on behalf of Borrowers to be the Payment
Office.
"PERMITTED ENCUMBRANCES" shall mean (a) Liens in favor of Agent for the
benefit of Lenders; (b) Liens for taxes, assessments or other governmental
charges not delinquent, or, being contested in good faith and by appropriate
proceedings and with respect to which proper reserves have been taken by
Borrowers; PROVIDED, THAT the Lien shall have no effect on the priority of the
Liens in favor of Agent or the value of the assets in which Agent has such a
Lien and a stay of enforcement of any such Lien shall be in effect; (c) Liens
disclosed in the financial statements referred to in Section 5.5; (d) deposits
or pledges to secure obligations under workmen's compensation, social security
or similar laws, or under unemployment insurance; (e) deposits or pledges to
secure bids, tenders, contracts (other than contracts for the payment of money),
Leases,
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statutory obligations, surety, performance and appeal bonds and other
obligations of like nature arising in the ordinary course of Borrowers'
business; (f) judgment Liens that have been stayed or bonded and mechanics',
worker's, materialmen's or other like Liens arising in the ordinary course of
Borrowers' business with respect to obligations which are not past due or which
are being contested in good faith by Borrowers; (g) Liens placed upon fixed
assets hereafter acquired to secure a portion of the purchase price thereof,
provided that (x) any such Lien shall not encumber any other property of any
Borrower and (y) the aggregate amount of Indebtedness secured by such Liens
incurred as a result of such purchases during any fiscal year shall not exceed
the amount provided for in Section 7.6; (h) Liens on Equipment in favor of CIT
and World as in existence on Closing Date; and (i) other Liens disclosed on
EXHIBIT 1.2(b).
"PERSON" shall mean an individual, a partnership, a corporation, a
business trust, a joint stock company, a trust, an unincorporated association, a
joint venture, a governmental authority or any other entity of whatever nature.
"PLEDGE AGREEMENT" shall mean that certain Pledge and Security Agreement
dated as of the Effective Date pursuant to which Greenwich pledges 65% of the
issued and outstanding stock of Caledonian to Agent and Trustee.
"PREPAYMENT DATE" shall have the meaning set forth in Section 13.1
hereof.
"PRIME RATE" for the purpose of this Agreement means the rate of interest
publicly announced from time to time by the Bank at its principal office in New
York as its prime rate or prime lending rate. This rate of interest is
determined from time to time by the Bank as a means of pricing some loans to its
customers and is neither tied to any external rate of interest or index nor does
it necessarily reflect the lowest rate of interest actually charged by the Bank
to any particular class or category of customers of the Bank.
"PRO FORMA BALANCE SHEET" shall have the meaning set forth in Section
5.5(a) hereof.
"PROJECTIONS" shall have the meaning set forth in Section 5.5(d) hereof.
"PROPERTY" shall have the meaning given to it in the Indenture.
"PURCHASE AGREEMENT" shall mean the Agreement of Purchase and Sale
between GASI, Greenwich, Aviall Services, Inc. and Aviall, Inc. dated April 19,
1996.
"RATE SWAP AGREEMENT" any interest rate swap, cap, interest rate collar
agreement or similar arrangement entered into,
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from time to time, by Borrowers and any one of the Lenders or a bank or
financial institution reasonably acceptable to Agent to protect the Borrowers
and any Lender against fluctuations in interest rates on the Obligations
incurred by the Borrowers under this Agreement.
"RCRA" shall mean the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 ET SEQ., as same may be amended from time to time.
"REAL PROPERTY" shall mean all of each Borrower's right, title and
interest by ownership or lease in and to the owned property located at 51
Bradley Park Road, East Granby, Connecticut 06026, the leased premises (and any
Improvements thereon) located at Buildings 21, 21A, 21B, and 23, 4590 N.W. 36th
Street, Miami, Florida 33122 and those leased premises set forth on SCHEDULE
1.2.
"RECEIVABLES" shall mean and include as to each Borrower all of such
Borrower's accounts, contract rights, instruments, documents, chattel paper,
general intangibles relating to accounts, drafts and acceptances, and all other
forms of obligations owing to such Borrower arising out of or in connection with
the sale or lease of Inventory or the rendition of services, all guarantees and
other security therefor, whether secured or unsecured, now existing or hereafter
created, and whether or not specifically assigned or pledged to Agent hereunder.
"RECEIVABLES ADVANCE RATE" shall mean singularly or collectively, the
Greenwich Receivables Advance Rate, Turbine Receivables Advance Rate, GTI
Receivables Advance Rate, Components Receivables Advance Rate, GASI Receivables
Advance Rate and Engine Services Receivables Advance Rate.
"REDEEMABLE STOCK" shall have the meaning given to it in the Indenture.
"RELEASE" shall have the meaning set forth in Section 5.7(c)(i) hereof.
"REQUIRED LENDERS" shall mean Lenders holding, in the aggregate, at least
fifty-one percent (51%) of the Advances or, if no Advances are outstanding, at
least fifty-one percent (51%) of the Commitment Percentages.
"REVOLVING ADVANCES" shall mean Advances made other than Letters of
Credit.
"REVOLVING INTEREST RATE" shall mean an interest rate per annum equal to
(a) with respect to Domestic Rate Loans, the sum of the Alternate Base Rate plus
the Applicable Margin and (b) with respect to Eurodollar Rate Loans, the sum of
the Eurodollar Rate plus the Applicable Margin.
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"SENIOR NOTES" shall mean the ___% Senior Notes due 2006 issued by
Greenwich pursuant to the Indenture in conjunction with the Transactions.
"SETTLEMENT DATE" shall mean the Effective Date and thereafter Wednesday
of each week unless such day is not a Business Day in which case it shall be the
next succeeding Business Day.
"SPECIFIED HOLDERS" shall have the meaning given to it in the Indenture.
"STATED MATURITY" shall have the meaning given to it in the Indenture.
"SUBORDINATED DEBENTURES" shall mean the $16,999,000, 8% convertible
subordinated debentures of Greenwich issued on November 12, 1993 (with respect
to debentures with an original face amount of $15,000,000) and December 10, 1993
(with respect to debentures with an original face amount of $1,999,000).
"SUBSIDIARY" of any Person shall mean a corporation or other entity of
whose shares of stock or other ownership interests having ordinary voting power
(other than stock or other ownership interests having such power only by reason
of the happening of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such entity, are
owned, directly or indirectly, by such Person.
"SUBSIDIARY GUARANTORS" shall have the meaning given to it in the
Indenture.
"TANGIBLE NET WORTH" shall mean, as of any date, the difference between
(a) Net Worth, as of such date, and (b) the aggregate amount, if any, included
in such Net Worth for goodwill, capitalized financial costs, customer lists,
intercompany Receivables, non-compete agreements, security deposits and deferred
taxes of Borrowers on a consolidated basis and all assets properly classified as
intangible assets in accordance with GAAP.
"TERM" shall mean the Effective Date through _________ ___, 2001.
"TEXAS BORROWERS" shall mean collectively, GASI, Engine Services and
Components.
"TOTAL REPAIRABLE INVENTORY" shall have the meaning set forth in the
definition of Eligible Inventory.
"TOXIC SUBSTANCE" shall mean and include any material present on the Real
Property which is subject to regulation under the Toxic Substances Control Act
(TSCA), 15 U.S. C. Section 2601 ET seq., applicable state law, or any other
applicable Federal or state laws
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now in force or hereafter enacted relating to toxic substances. "Toxic
Substance" includes but is not limited to asbestos, polychlorinated biphenyls
(PCBs) and lead-based paints.
"TRANSACTIONS" shall have the meaning given to it in Section 5.5 hereof.
"TRUSTEE" shall mean American Stock Transfer & Trust Company.
"TURBINE" shall have the meaning set forth in the introductory paragraph
hereof.
"TURBINE ADVANCE RATES" shall have the meaning set forth in Section
2.1(b)(ii)
"TURBINE FORMULA AMOUNT" shall have the meaning set forth in Section
2.1(b) hereof.
"TURBINE INVENTORY ADVANCE RATE" shall have the meaning set forth in
Section 2.1(b)(ii) hereof.
"TURBINE RECEIVABLES ADVANCE RATE" shall have the meaning set forth in
Section 2.1(b)(i) hereof.
"TURBINE TERM LOAN" shall mean a loan made to Turbine by the Turbine Term
Loan Lender in the original principal amount of $__________.
"TURBINE TERM LOAN DOCUMENTS" shall mean the loan agreement and related
documents entered into by Turbine with the Turbine Term Loan Lender.
"TURBINE TERM LOAN LENDER" shall mean CIT.
"U.K. GUARANTIES" shall mean each guaranty issued by a Borrower to Agent
of the obligations of Caledonian to ______________ under the Caledonian Credit
Agreement.
"UNDRAWN AVAILABILITY" shall at any given date mean the amount equal to
the difference between (a) the lesser of (i) Maximum Loan Amount, and (ii)
Formula Amount as of such date, MINUS (b) the aggregate outstanding Advances on
such date after giving effect to any outstanding requests by Borrowers for
Advances as of that date.
"VOTING STOCK" shall have the meaning given to it in the Indenture.
"WEEK" shall mean the time period commencing with a Wednesday and ending
on the following Tuesday.
"WORLD" shall mean World Air Lease, Inc., a Florida corporation.
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"WORLD LOAN DOCUMENTS" shall mean the $3,000,000 promissory note from
Greenwich to World dated November 5, 1992 and all other agreements and documents
executed in connection therewith which are listed on EXHIBIT 1.2(c); true and
complete copies of which have been furnished to BNYCC.
1.3 UNIFORM COMMERCIAL CODE TERMS. All terms used herein and defined
in the Uniform Commercial Code as adopted in the State of New York shall have
the meaning given therein unless otherwise defined herein.
1.4 CERTAIN MATTERS OF CONSTRUCTION. The terms "herein", "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. Wherever appropriate in the context,
terms used herein in the singular also include the plural and VICE versa. The
words "include", "includes" and "including" shall be deemed to be followed by
the phrase "without limitation". In computing periods of time from a specified
date to a later specified date, the word "from" means "from and including" and
the words "to" and "until" each means "to but excluding". All references to
statutes and regulations shall include any amendments of same and any successor
statutes and regulations. All references to any instrument or agreements to
which any Borrower and any Lender or Agent are parties including, without
limitation, references to any of the Other Documents, shall include any and all
modifications or amendments thereto and any and all extensions or renewals
thereof.
II. ADVANCES AND PAYMENTS
2.1 (a) GREENWICH BORROWING BASE. Subject to the terms and
conditions set forth in this Agreement, each Lender, severally and not jointly,
agrees to make Revolving Advances to Greenwich in accordance with the procedures
provided for herein in an aggregate amount outstanding at any time not greater
than such Lender's Commitment Percentage of the lesser of (x) the Maximum Loan
Amount MINUS the sum of (1) outstanding Advances made to or for the benefit of
Turbine, GTI, Components, GASI and Engine Services and (2) the undrawn amount of
outstanding Letters of Credit issued on behalf of Greenwich, or (y) the sum of:
(i) up to 85%, subject to the provisions of Section
2.1(g) and Section 2.1(h) hereof ("Greenwich Receivables Advance Rate"), of
Eligible Receivables of Greenwich, PLUS
(ii) up to 55%, subject to the provisions of Section
2.1(g) and Section 2.1(h) hereof ("Greenwich Inventory Advance Rate"), of
Eligible Inventory of Greenwich (the Greenwich Receivables Advance Rate and the
Greenwich Inventory
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Advance Rate shall be referred to, collectively, as the "Greenwich Advance
Rates"), MINUS
(iii) such reserves as Agent may, in a commercially
reasonable manner, reasonably deem proper and necessary, including, without
limitation, the Interest Reserve; PROVIDED, that the Interest Reserve shall only
apply if and for so long as an Event of Default shall exist, MINUS
(iv) the undrawn amount of outstanding Letters of Credit
issued on behalf of Greenwich.
The amounts derived from (x) the sum of Sections 2.1(a)(y)(i) PLUS
2.1(a)(y)(ii) MINUS (y) the sum of Sections 2.1(a)(y)(iii) and 2.1(a)(y)(iv) at
any time and from time to time shall be referred to as the "Greenwich Formula
Amount".
(b) TURBINE BORROWING BASE. Subject to the terms and
conditions set forth in this Agreement, each Lender, severally and not jointly,
agrees to make Revolving Advances to Turbine in accordance with the procedures
provided for herein in an aggregate amount outstanding at any time not greater
than such Lender's Commitment Percentage of the lesser of (x) the Maximum Loan
Amount MINUS the sum of (1) outstanding Advances made to or for the benefit of
Greenwich, GTI, Components, GASI and Engine Services and (2) the undrawn amount
of outstanding Letters of Credit issued on behalf of Turbine or (y) the sum of:
(i) up to 85%, subject to the provisions of Section
2.1(g) and Section 2.1(i) hereof ("Turbine Receivables Advance Rate"), of
Eligible Receivables of Turbine, PLUS
(ii) up to 55%, subject to the provisions of Section
2.1(g) and Section 2.1(h) hereof ("Turbine Inventory Advance Rate"), of Eligible
Inventory of Turbine (the Turbine Receivables Advance Rate and the Turbine
Inventory Advance Rate shall be referred to, collectively, as the "Turbine
Advance Rates"), MINUS
(iii) such reserves as Agent may, in a commercially
reasonable manner, reasonably deem proper and necessary, including, without
limitation, the Interest Reserve; PROVIDED, that the Interest Reserve shall only
apply if and for so long as an Event of Default shall exist, MINUS
(iv) the undrawn amount of outstanding Letters of Credit
issued on behalf of Turbine.
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The sum of the amounts derived from (x) the sum of Sections
2.1(b)(y)(i) PLUS 2.1(b)(y)(ii) MINUS (y) the sum of Sections 2.1(b)(y)(iii) and
2.1(b)(y)(iv) at any time and from time to time shall be referred to as the
"Turbine Formula Amount".
(c) GTI BORROWING BASE. Subject to the terms and conditions
set forth in this Agreement, each Lender, jointly and not severally, agrees to
make Revolving Advances to GTI in accordance with the procedures provided for
herein in an aggregate amount outstanding at any time not greater than such
Lender's Commitment Percentage of the lesser of (x) the Maximum Loan Amount
MINUS the sum of (1) outstanding Advances made to or for the benefit of
Greenwich, Turbine, Components, GASI and Engine Services and (2) the undrawn
amount of outstanding Letters of Credit issued on behalf of GTI or (y) the sum
of:
(i) up to 85%, subject to the provisions of Section
2.1(g) and Section 2.1(i) hereof ("GTI Receivables Advance Rate"), of Eligible
Receivables of GTI, PLUS
(ii) up to 55%, subject to the provisions of Section
2.1(g) and Section 2.1(h) hereof ("GTI Inventory Advance Rate"), of Eligible
Inventory of GTI (the GTI Receivables Advance Rate and the GTI Inventory Advance
Rate shall be referred to, collectively, as the "GTI Advance Rates"), MINUS
(iii) such reserves as Agent may, in a commercially
reasonable manner, reasonably deem proper and necessary including, without
limitation, the Interest Reserve; PROVIDED, that the Interest Reserve shall only
apply if and for so long as an Event of Default shall exist, MINUS
(iv) the undrawn amount of outstanding Letters of Credit
issued on behalf of GTI.
The sum of the amounts derived from (x) the sum of (i) Sections
2.1(c)(y)(i) PLUS 2.1(c)(y)(ii) MINUS (y) the sum of Sections 2.1(c)(y)(iii) and
2.1(c)(y)(iv) at any time and from time to time shall be referred to as the "GTI
Formula Amount".
(d) COMPONENTS BORROWING BASE. Subject to the terms and
conditions set forth in this Agreement, each Lender, severally and not jointly,
agrees to make Revolving Advances to Components in accordance with the
procedures provided for herein in an aggregate amount outstanding at any time
not greater than such Lender's Commitment Percentage of the lesser of (x) the
Maximum Loan Amount MINUS the sum of (1) outstanding Advances made to or for the
benefit of Greenwich, Turbine, GASI, GTI and Engine Services and (2) the undrawn
amount of outstanding Letters of Credit issued on behalf of Components or (y)
the sum of:
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(i) up to 85%, subject to the provisions of Section
2.1(h) and Section 2.1(j) hereof ("Components Receivables Advance Rate"), of
Eligible Receivables of Components, PLUS
(ii) up to 55%, subject to the provisions of Section
2.1(g) and Section 2.1(h) hereof ("Components Inventory Advance Rate"), of
Eligible Inventory of Components, PLUS
(iii) up to 55%, subject to the provisions of Section
2.1(g), Section 2.1(i) and Section 2.1(j) (the Components Receivables Advance
Rate and the Components Inventory Advance Rate and the Components Unbilled
Receivables Advance Rate shall be referred to, collectively, as the "Components
Advance Rates") of the Eligible Unbilled Receivables of Components, MINUS
(iv) such reserves as Agent may, in a commercially
reasonable manner, reasonably deem proper and necessary, including, without
limitation, the Interest Reserve; PROVIDED, that the Interest Reserve shall only
apply if and for so long as an Event of Default shall exist, MINUS
(v) the undrawn amount of outstanding Letters of Credit
issued on behalf of Components.
The sum of the amounts derived from (x) the sum of (i) Sections
2.1(d)(y)(i) PLUS 2.1(d)(y)(ii) PLUS 2.1(d)(y)(iii) MINUS (y) the sum of
Sections 2.1(d)(y)(iv) and 2.1(d)(y)(v) at any time and from time to time shall
be referred to as the "Components Formula Amount".
(e) GASI BORROWING BASE. Subject to the terms and conditions
set forth in this Agreement, each Lender, jointly and not severally, agrees to
make Revolving Advances to GASI in accordance with the procedures provided for
herein in an aggregate amount outstanding at any time not greater than such
Lender's Commitment Percentage of the lesser of (x) the Maximum Loan Amount
MINUS the sum of (1) outstanding Advances made to or for the benefit of
Greenwich, Turbine, GTI, Components and Engine Services and (2) the undrawn
amount of outstanding Letters of Credit issued on behalf of GASI, or (y) the sum
of:
(i) up to 85%, subject to the provisions of Section
2.1(g) and Section 2.1(i) hereof ("GASI Receivables Advance Rate"), of Eligible
Receivables of GASI, PLUS
(ii) up to 55%, subject to the provisions of Section
2.1(g) and Section 2.1(h) hereof ("GASI Inventory Advance Rate"), of Eligible
Inventory of GASI (the GASI Receivables Advance Rate and the GASI Inventory
Advance Rate shall be referred to, collectively, as the "GASI Advance Rates"),
PLUS
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(iii) up to 55%, subject to the provisions of Section
2.1(g), Section 2.1(i) and Section 2.1(j) (the GASI Receivables Advance Rate and
the GASI Inventory Advance Rate and the GASI Unbilled Receivables Advance Rate
shall be referred to, collectively, as the "GASI Advance Rates") of the Eligible
Unbilled Receivables of GASI, MINUS
(iv) such reserves as Agent may, in a commercially
reasonable manner, reasonably deem proper and necessary including, without
limitation, the Interest Reserve; PROVIDED, that the Interest Reserve shall only
apply if and for so long as an Event of Default shall exist, MINUS
(v) the undrawn amount of outstanding Letters of Credit
issued on behalf of GASI.
The sum of the amounts derived from (x) the sum of (i) Sections
2.1(e)(y)(i) PLUS 2.1(e)(y)(ii) PLUS 2.1(e)(y)(iii) MINUS (y) the sum of
Sections 2.1(e)(y)(iv) and 2.1(e)(y)(v) at any time and from time to time shall
be referred to as the "GASI Formula Amount".
(f) ENGINE SERVICES BORROWING BASE. Subject to the terms and
conditions set forth in this Agreement, each Lender, severally and not jointly,
agrees to make Revolving Advances to Engine Services in accordance with the
procedures provided for herein in an aggregate amount outstanding at any time
not greater than such Lender's Commitment Percentage of the lesser of (x) the
Maximum Loan Amount MINUS the sum of (1) outstanding Advances made to or for the
benefit of Greenwich, Turbine, GASI, GTI and Components and (2) the undrawn
amount of outstanding Letters of Credit issued on behalf of Engine Services or
(y) the sum of:
(i) up to 85%, subject to the provisions of Section
2.1(g) and Section 2.1(i) hereof ("Engine Services Receivables Advance Rate"),
of Eligible Receivables of Engine Services, PLUS
(ii) up to 55%, subject to the provisions of Section
2.1(g) and Section 2.1(h) hereof ("Engine Services Inventory Advance Rate"), of
Eligible Inventory of Engine Services (the Engine Services Receivables Advance
Rate and the Engine Services Inventory Advance Rate shall be referred to,
collectively, as the "Engine Services Advance Rates"), PLUS
(iii) up to 55%, subject to the provisions of Section
2.1(g), Section 2.1(i) and Section 2.1(j) (the Engine Services Receivables
Advance Rate and the Engine Services Inventory Advance Rate and the Engine
Services Unbilled Receivables Advance Rate shall be referred to, collectively,
as the "Engine Services Advance Rates") of the Eligible Unbilled Receivables of
Engine Services, MINUS
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(iv) such reserves as Agent may, in a commercially
reasonable manner, reasonably deem proper and necessary, including, without
limitation, the Interest Reserve; PROVIDED, that the Interest Reserve shall only
apply if and for so long as an Event of Default shall exist, MINUS
(v) the undrawn amount of outstanding Letters of Credit
issued on behalf of Engine Services, MINUS
The sum of the amounts derived from (x) the sum of (i) Sections
2.1(f)(y)(i) PLUS 2.1(f)(y)(ii) PLUS 2.1(f)(y)(iii) MINUS the sum of Sections
2.1(f)(y)(iv) and 2.1(f)(y)(v) at any time and from time to time shall be
referred to as the "Engine Services Formula Amount".
(g) DISCRETIONARY RIGHTS. The Advance Rates may be increased
by Agent with the consent of the Lenders or decreased by Agent at any time and
from time to time in the good faith exercise of its reasonable discretion;
PROVIDED, HOWEVER, that Agent shall not: (i) decrease any Advance Rate by more
than five (5%) percent during any forty-five (45) day period (for example, from
85% to 80% with respect to any Receivables Advance Rate); or (ii) decrease any
Inventory Advance Rate below 45%. Borrowers consent to any such increases or
decreases and acknowledge that decreasing the Advance Rates may limit or
restrict Advances requested by Borrowers. Agent shall in each instance give
Borrowers not less than five (5) Business Days' prior written notice of its
intention to decrease any of the Advance Rates.
(h) INVENTORY ADVANCES. In no event shall the aggregate
Advances with respect to Inventory of Borrowers outstanding at any time pursuant
to Section 2.1(a)(ii), Section 2.1(b)(ii), Section 2.1(c)(ii), Section
2.1(d)(ii) and Section 2.1(e)(ii) and Section 2.1(f)(ii) exceed $130,000,000 in
the aggregate.
(i) RECEIVABLES ADVANCES. In no event shall the aggregate
Advances with respect to Continental Receivables outstanding at any time
pursuant to Sections 2.1(a)(i), 2.1(b)(i), 2.1(c)(i), 2.1(d)(i), 2.1(e)(i),
2.1(f)(i), 2.1(d)(iii), 2.1(e)(iii) and 2.1(f)(iii) exceed [$15,000,000] in the
aggregate.
(j) UNBILLED RECEIVABLES. In no event shall the aggregate
Advances with respect to Eligible Unbilled Receivables of Borrowers outstanding
at any time pursuant to Sections 2.1(d)(iii), 2.1(e)(iii) and 2.1(f)(iii) exceed
$12,000,000 in the aggregate.
(k) INDIVIDUAL REVOLVING ADVANCES. Each Lender, severally and
not jointly, will make Revolving Advances to each Borrower in aggregate amounts
outstanding at any time not greater
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than such Lender's Commitment Percentage of the applicable Formula Amount.
Notwithstanding the foregoing, for the first ninety (90) days after Effective
Date, Lenders will make Advances to GASI, Components and Engine Services up to
an amount equal to the lesser of (x) the Maximum Loan Amount MINUS the sum of
(1) outstanding Advances made to or for the benefit of Greenwich, Turbine and
GTI and (2) the undrawn amount of outstanding Letters of Credit issued on behalf
of GASI, Components and Engine Services or (y) the sum of the GASI Formula
Amount, Components Formula Amount and Engine Services Formula Amount. In the
event that GASI, Components and Engine Services shall not have merged and/or
consolidated with and into each other such that one of them shall remain as the
surviving entity by the ninetieth (90th) day following the Effective Date, (i)
all new Advances made to each of GASI, Components and Engine Services will be
made, from and after the ninety first (91st) day following the Effective Date
shall be made to each individually in accordance with the provisions of Sections
2.1(d), (e) and (f) and (ii) all then outstanding Advances will be apportioned
among such Borrowers' loan accounts in accordance with the Advance Requests
received by Agent which preceded the making of such Advances and the proceeds of
Collateral received by Agent with respect to such Borrower such determination by
Agent with respect to the foregoing shall be conclusive absent manifest error.
2.2 NOTES. The Advances shall be evidenced by amended and restated
promissory notes of the Borrowers, substantially in the form of EXHIBIT 2.2 (the
"Notes") with appropriate insertion as to date and principal amount, payable to
the order of each Lender in an amount equal to its respective Commitment
Percentage of Receivable Advances.
C\7 PROCEDURE FOR BORROWING.
(a) In the event any Borrower desires to obtain a Domestic Rate
Loan Greenwich on behalf of Borrowers shall give Agent at least one (1) Business
Days prior telephonic notice ("Advance Request") on or before 11:00 A.M., New
York time (except as may be set forth below) specifying (i) the date of the
proposed borrowing (which shall be a Business Day) and (ii) the type of
borrowing and the amount to be borrowed, which amount on the date of such
Advance shall be in a minimum amount of $250,000 and in integral multiples of
$100,000 for borrowings in excess thereof. In addition, as a convenient means
of effecting Advances, Borrowers will each maintain a controlled disbursement
account (business checking) with the Bank at its branch located at 1290 6th
Avenue, New York, New York 10104 (collectively, "Checking Accounts"). Each
Checking Account will act as a corporate payable account for such Borrower.
Once each Business Day following receipt by the Bank of its Federal Reserve
system clearing (which may be later than 11:00 a.m. New York time but must be
earlier than 1:00 p.m. New York time), Bank will notify Agent of the total
dollar amount of checks presented to Bank for payment for each Checking Account
since the previous Business Day's notification (the "Payable Amount"). Such
notification shall be
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deemed to be an Advance Request for an Advance to be made on such Business Day
to the respective Borrower's Checking Account in an amount equal to the Payable
Amount, but Agent and Lenders shall not be obligated to honor such Advance
Request except as herein specifically required. Any request for an Advance
shall be deemed reduced automatically and without notice so as not to be in
excess of, after giving effect to the requested Advance, an amount which would
cause the aggregate amount of all Advances to be greater than the lesser of (a)
for Greenwich, (i) the Maximum Loan Amount MINUS outstanding Advances made to
Turbine, GTI, Components, GASI and Engine Services or (ii) the Greenwich Formula
Amount, (b) for Turbine, (i) the Maximum Loan Amount MINUS outstanding Advances
made to Greenwich, GTI, Components, GASI and Engine Services or (ii) the Turbine
Formula Amount (c) for GTI, (i) the Maximum Loan Amount MINUS outstanding
Advances made to Greenwich, Turbine, Components, GASI and Engine Services or
(ii) the GTI Formula Amount, (d) for Components, (i) the Maximum Loan Amount
MINUS outstanding Advances made to Greenwich, GTI, Turbine, GASI and Engine
Services or (ii) the Components Formula Amount, (e) for GASI, (i) the Maximum
Loan Amount MINUS outstanding Advances made to Greenwich, GTI, Turbine,
Components and Engine Services or (ii) the GASI Formula Amount, and (f) for
Engine Services, (i) the Maximum Loan Amount MINUS outstanding Advances made to
Greenwich, GTI, Turbine, GASI and Components or (ii) the Engine Services Formula
Amount. Subject to the provisions of Section 2.7 hereof, the proceeds of each
Advance shall be made available by Agent to Borrowers on or before 1:45 p.m.,
New York time (except with respect to Advances to the Checking Accounts which
shall be made available on or before 1:45 p.m. New York time), on the Business
Day specified in the Advance Request by wire transferring immediately available
funds in such amount or causing immediately available funds in such amount to be
wire transferred to the account of the applicable Borrower, as shall be
designated to Agent in the Advance Request therefor.
(b) Notwithstanding the provisions of 2.3(a) above, in the
event any Borrower desires to obtain a Eurodollar Rate Loan, Greenwich on behalf
of such Borrower shall give Agent at least three (3) Business Days' prior
written notice specifying (i) the date of the proposed borrowing (which shall be
a Business Day), (ii) the type of borrowing and the amount to be borrowed, which
amount on the date of such Advance shall be in a minimum amount of $1,000,000
and in integral multiples of $100,000 for borrowings in excess thereof and (iii)
the duration of the first Interest Period therefor. Interest Periods for
Eurodollar Rate Loans shall be for 30, 60 or 90 days. Notwithstanding anything
contained herein, no Eurodollar Rate Loan shall be made (i) until the later to
occur of (x) ninety (90) days following the Effective Date or (y) the date on
which the Commitment Percentages of all Lenders (other than BNYCC) shall
aggregate _____%, (ii) upon the occurrence and during the continuation of an
Event of Default and (iii) if after giving effect to such Eurodollar Rate Loan
more than six (6) shall be outstanding at such time.
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(c) Each Interest Period of a Eurodollar Rate Loan shall
commence on the date such Eurodollar Rate Loan is made and shall end on such
date as Borrowers may elect as set forth in (b)(iii) above provided that:
(i) any Interest Period which would otherwise end on a
day which is not a Business Day shall end on the next preceding or succeeding
Business Day as is the Bank's custom in the market to which such Eurodollar Rate
Loan relates;
(ii) no Interest Period shall end after the last day of
the Term;
(iii) any Interest Period which begins on a day for which
there is no numerically corresponding day in the calendar month during which
such Interest Period is to end, shall (subject to clause (i) above) end on the
last day of such calendar month.
The Borrowers shall elect the initial Interest Period applicable to a
Eurodollar Rate Loan by Greenwich's notice of borrowing (on behalf of the
Borrowers) given to Agent pursuant to Section 2.3(b) or by its notice of
conversion given to Agent pursuant to Section 2.3(d), as the case may be.
Greenwich on behalf of Borrowers shall elect the duration of each succeeding
Interest Period by giving irrevocable written notice to Agent of such duration
not less than three (3) Business Days prior to the last day of the then current
Interest Period applicable to such Eurodollar Rate Loan. If Agent does not
receive timely notice of the Interest Period elected by Greenwich on behalf of
Borrowers, Borrowers shall be deemed to have elected to convert to a Domestic
Rate Loan subject to Section 2.3(d) hereinbelow.
(d) Provided that no Event of Default shall have occurred and
be continuing, the Borrowers may, on the last Business Day of the then current
Interest Period applicable to any outstanding Eurodollar Rate Loan, continue any
such loan in the same aggregate principal amount. If a Borrower desires to
convert a loan, Greenwich on behalf of such Borrower shall give Agent not less
than three (3) Business Days' prior written notice, specifying the date of such
conversion, the loans to be converted and if the conversion is from a Domestic
Rate Loan to a Eurodollar Loan, the duration of the first Interest Period
therefor. After giving effect to each such conversion, there shall not be
outstanding more than six (6) Eurodollar Rate Loans, in the aggregate.
(e) At their option and upon three (3) Business Days' prior
written notice, Borrowers may prepay the Advances in whole at any time, with
accrued interest on the principal being prepaid to the date of such prepayment.
In the event that any prepayment of a Eurodollar Rate Loan is required or
permitted on a date other than the last Business Day of the then current
Interest Period with respect thereto, the Borrowers shall indemnify Agent and
Lenders therefor in accordance with Section 2.3(f) hereof.
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(f) Each Borrower shall indemnify Agent and Lenders and hold
Agent and Lenders harmless from and against any and all losses or expenses that
Agent or any Lender may sustain or incur as a consequence of any prepayment or
any default by the Borrowers in the payment of the principal of or interest on
any Eurodollar Rate Loan or failure by the Borrowers to complete a borrowing of,
a prepayment of or conversion of or to a Eurodollar Rate Loan after notice
thereof has been given, including (but not limited to) any interest payable by
Agent or Lenders to lenders of funds obtained by it in order to make or maintain
its Eurodollar Rate Loans hereunder.
(g) Notwithstanding any other provision hereof, if any
applicable law, treaty, regulation or directive, or any change therein or in the
interpretation or application thereof, shall make it unlawful for any Lender
(for purposes of this subsection (g), Section 2.12 and Section 2.13, the term
"Lender" shall include any Lender and the office or branch where any Lender or
any corporation or bank controlling such Lender makes or maintains any
Eurodollar Rate Loans) to make or maintain its Eurodollar Rate Loans, the
obligation of any Lender to make Eurodollar Rate Loans hereunder shall forthwith
be cancelled and the Borrowers shall, if any affected Eurodollar Rate Loans are
then outstanding, promptly upon request from Agent, either pay all such affected
Eurodollar Rate Loans or convert such affected Eurodollar Rate Loans into
Domestic Loans. If any such payment or conversion of any Eurodollar Rate Loan
is made on a day that is not applicable to such Eurodollar Rate Loan, the
Borrowers shall pay Lenders, upon Agent's request, such amount or amounts as may
be necessary to compensate Lenders for any loss or expense sustained or incurred
by Lenders in respect of such Eurodollar Rate Loan as a result of such payment
or conversion, including (but not limited to) any interest or other amounts
payable by the Agent or Lenders to lenders of funds obtained by Agent or Lenders
in order to make or maintain such Eurodollar Rate Loan. A certificate as to any
additional amounts payable pursuant to the foregoing sentence submitted by Agent
to the Borrowers shall be conclusive absent manifest error.
(h) Should any amount required to be paid by Borrowers as
principal or interest hereunder, or as fees or other charges under this
Agreement or any Other Documents, or with respect to any other Obligation,
become due and payable, same shall be deemed a request for an Advance as of the
date such payment is due, in the amount required to pay in full such interest,
principal, fee, charge or other Obligation under this Agreement and/or any Other
Documents, and such request shall be irrevocable.
2.4 DISBURSEMENT OF ADVANCE PROCEEDS. All Advances shall be disbursed
from whichever office or other place Agent may designate from time to time and,
together with any and all other Obligations of Borrowers to Agent or any Lender,
shall be charged to Borrowers' accounts on the Agent's books. During the Term,
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Borrowers may use the Advances (subject to the limitations set forth in Section
2.1 hereof) by borrowing, prepaying and reborrowing, all in accordance with the
terms and conditions hereof.
2.5 REPAYMENT OF ADVANCES. The Advances shall be due and payable in
full on the last day of the Term subject to earlier prepayment as herein
provided.
2.6 REPAYMENT OF EXCESS ADVANCES.
The aggregate balance of Advances outstanding at any time either
(a) to Greenwich in excess of the lesser of the (i) Greenwich Formula Amount as
at such time, or (ii) Maximum Loan Amount MINUS the outstanding Advances made to
or for the benefit of Turbine, GTI, Components, GASI and Engine Services or (b)
to or for the benefit of Turbine in excess of the lesser of (i) Turbine Formula
Amount as at such time, or (ii) Maximum Loan Amount MINUS the outstanding
Advances made to or for the benefit of Greenwich, GTI, Components, GASI and
Engine Services or (c) to GTI in excess of the lesser of the (i) GTI Formula
Amount as at such time, or (ii) Maximum Loan Amount MINUS the outstanding
Advances made to or for the benefit of Greenwich, Turbine, Components, GASI and
Engine Services or (d) to GASI in excess of the lesser of the (i) GASI Formula
Amount as at such time, or (ii) Maximum Loan Amount MINUS the outstanding
Advances made to or for the benefit of Greenwich, Turbine, Components, GTI and
Engine Services or (e) to Components in excess of the lesser of the (i)
Components Formula Amount as at such time, or (ii) Maximum Loan Amount MINUS the
outstanding Advances made to or for the benefit of Greenwich, Turbine, GTI, GASI
and Engine Services, or (f) to Engine Services in excess of the lesser of the
(i) Engine Services Formula Amount as at such time, or (ii) Maximum Loan Amount
MINUS the outstanding Advances made to or for the benefit of Greenwich, Turbine,
GTI, GASI and Engine Services shall be immediately due and payable without the
necessity of any demand, at the place designated by Agent, whether or not an
Incipient Event of Default or Event of Default has occurred hereunder. In no
event shall the aggregate balance of Advances outstanding at any time to
Borrowers exceed the Maximum Loan Amount.
2.7 MANNER OF BORROWING AND PAYMENT. (a) Except as expressly provided
herein, all payments (including prepayments) to be made by Borrowers on account
of principal, interest and fees shall be made without set-off or counterclaim
and shall be made to the Agent to the Payment Office, in each case on or prior
to 1:00 p.m., New York time, in Dollars and in immediately available funds.
(b) Each borrowing of Revolving Advances shall be advanced
according to the Commitment Percentages of the Lenders.
(c) (i) Notwithstanding anything to the contrary contained in
Sections 2.7(a) and (b) hereof, commencing with the first Business Day following
the Effective Date, each borrowing of
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Revolving Advances shall be advanced by Agent and each payment by Borrower on
account of Revolving Advances shall be applied first to those Revolving Advances
made by Agent. On or before [1:00 P.M.], New York time, on each Settlement Date
commencing with the first Settlement Date following the Effective Date, Agent
and the Lenders shall make certain payments as follows: (I) if the aggregate
amount of new Revolving Advances made by Agent during the preceding Week exceeds
the aggregate amount of repayments applied to outstanding Revolving Advances
during such preceding Week, then each Lender shall provide Agent with funds in
an amount equal to its Commitment Percentage of the difference between (w) such
Revolving Advances and (x) such repayments and (II) if the aggregate amount of
repayments applied to outstanding Revolving Advances during such Week exceeds
the aggregate amount of new Revolving Advances made during such Week, then Agent
shall provide each Lender with its Commitment Percentage of the difference
between (y) such repayments and (z) such Revolving Advances.
(ii) Each Lender shall be entitled to earn interest at
the applicable Contract Rate on outstanding Advances which it has funded.
(iii) Promptly following each Settlement Date, Agent shall
submit to each Lender a certificate with respect to payments received and
Advances made during the Week immediately preceding such Settlement Date. Such
certificate of Agent shall be conclusive in the absence of manifest error.
(d) If any Lender or Participant (a "benefitted Lender") shall
at any time receive any payment of all or part of its Advances, or interest
thereon, or receive any Collateral in respect thereof (whether voluntarily or
involuntarily or by set-off) in a greater proportion than any such payment to
and Collateral received by any other Lender, if any, in respect of such other
Lender's Advances, or interest thereon, and such greater proportionate payment
or receipt of Collateral is not expressly permitted hereunder, such benefitted
Lender shall purchase for cash from the other Lenders such portion of each such
other Lender's Advances, or shall provide such other Lender with the benefits of
any such Collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of the Lenders; PROVIDED, HOWEVER, that
if all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. Each Lender so purchasing a portion of another Lender's Advances may
exercise all rights of payment (including, without limitation, rights of set-
off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.
(e) Unless Agent shall have been notified by telephone,
confirmed in writing, by any Lender that such Lender
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will not make the amount which would constitute its Commitment Percentage of the
Advances available to Agent, Agent may (but shall not be obligated to) assume
that such Lender shall make such amount available to Agent and, in reliance upon
such assumption, make available to Borrowers a corresponding amount. Agent will
promptly notify Borrowers of its receipt of any such notice from a Lender. If
such amount is made available to Agent on a date after a Settlement Date, such
Lender shall pay to Agent on demand an amount equal to the product of (i) the
daily average Federal Funds Rate (computed on the basis of a year of 360 days)
during such period as quoted by Agent, times (ii) such amount, times (iii) the
number of days from and including such Settlement Date to the date on which such
amount becomes immediately available to Agent. A certificate of Agent submitted
to any Lender with respect to any amounts owing under this paragraph (e) shall
be conclusive, in the absence of manifest error. If such amount is not in fact
made available to Agent by such Lender within three (3) Business Days after such
Settlement Date, Agent shall be entitled to recover such an amount, with
interest thereon at the rate per annum then applicable to Revolving Advances
hereunder, on demand from Borrowers; PROVIDED, HOWEVER, that Agent's right to
such recovery shall not prejudice or otherwise adversely affect Borrowers'
rights (if any) against such Lender.
2.8 STATEMENT OF ACCOUNT. Agent shall maintain, in accordance with
its customary procedures, a loan account in the name of each Borrower in which
shall be recorded the date and amount of each Advance to such Borrower made by
Agent and the date and amount of each repayment, prepayment or other payment in
respect thereof; PROVIDED, HOWEVER, the failure by Agent to record the date and
amount of any Advance shall not adversely affect Agent and the failure of the
Agent to record the date and amount of any repayment or prepayment of any
Advance shall not adversely affect such Borrower nor give it any rights vis a
vis Agent. For each month, Agent shall send to Greenwich on behalf of Borrowers
a statement showing the accounting for the Advances made, payments made or
credited in respect thereof, and other transactions between the Agent, Lenders
and each Borrower, during such month. The monthly statements shall be deemed
correct and binding upon the Borrowers in the absence of manifest error, and
shall constitute an account stated between Lenders and each Borrower unless
Agent receives a written statement of specific exceptions within thirty (30)
days after such statement is received by Borrowers. The records of Agent with
respect to the loan accounts shall be prima facie evidence of the amounts of
Advances and other changes thereto and of payments applicable thereto.
2.9 NO DEDUCTIONS. Each Borrower shall pay principal, interest, and
all other amounts payable hereunder, or under any Other Documents, without any
deduction whatsoever, including, but not limited to, any deduction for any
setoff or counterclaim.
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2.10 MANDATORY PREPAYMENTS.
(a) When any Borrower sells or otherwise disposes of any
Collateral (other than Inventory in the ordinary course of business) such
Borrower shall repay the Advances in an amount equal to the difference between
(i) the cash proceeds of such sale or other disposition (except as otherwise
provided by Section 4.3) and (ii) the reasonable costs of such sale or other
disposition (in the case of subclauses (i) and (ii) above after giving effect to
all tax benefits or obligations in accordance with GAAP), such repayment to be
made promptly but in no event more than five (5) Business Days following receipt
of the net cash proceeds thereof, and until the date of payment, such proceeds
shall be held in trust for Lenders. The foregoing shall not be deemed to be
implied consent to any such sale otherwise prohibited by the terms and
conditions hereof.
2.11 ADDITIONAL PAYMENTS. To the extent that Agent may, in the
exercise of its rights under this Agreement, make an expenditure due to any
Borrower's failure to perform or comply with its obligations under this
Agreement or any Other Document, any reasonable amounts so expended by Agent may
be charged to such Borrower's account as a Revolving Advance and added to the
Obligations. Agent shall provide such Borrower, if requested, with
documentation to evidence such expenditure and shall provide such Borrower with
notice immediately prior to the making of such payment; PROVIDED, that the
failure of Agent to give such notice shall not adversely affect Agent's rights
hereunder. In the event that at the time such sum is expended the unpaid
balance of Advances to any Borrower exceeds or would exceed, with the making of
such expenditure, the lesser of the Maximum Loan Amount MINUS the outstanding
Advances made to the other Borrowers or the Greenwich Formula Amount with
respect to Greenwich or the Turbine Formula Amount with respect to Turbine or
the GTI Formula Amount with respect to GTI or the GASI Formula Amount with
respect to GASI, or the Components Formula Amount with respect to Components, or
the Engine Services Formula Amount with respect to Engine Services such Borrower
shall on demand repay the Advances in the amount by which such expenditure
causes such excess.
2.12 INCREASED COSTS. In the event a change in any applicable law,
treaty or governmental regulation, in the interpretation or application thereof,
or compliance by Agent or any Lender with any new request or directive (whether
or not having the force of law) from any central bank or other financial,
monetary or other authority which is generally applicable to lenders similarly
situated to Agent or any Lender shall
(a) subject the Agent or any Lender to any tax of any kind
whatsoever (excluding taxes based on the income of Agent or any Lender) with
respect to this Agreement or change the basis of taxation of payments to Agent
or any Lender of principal, fees, interest or any other amount payable hereunder
or under any Other Documents;
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(b) impose, modify or hold applicable any reserve, special
deposit, assessment or similar requirement against assets held by, or deposits
in or for the account of, advances or loans by, or other credit extended by, any
office of Agent or any Lender, including (without limitation) pursuant to
Regulation D of the Board of Governors of the Federal Reserve System; or
(c) impose on Agent or any Lender any other condition with
respect to this Agreement or any Other Documents;
and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, renewing or maintaining its Advances hereunder by an amount
that Agent or any Lender deems to be material or to reduce the amount of any
payment by or for the account of any Borrower (whether of principal, interest or
otherwise) in respect of any of the Advances by an amount that Agent or any
Lender deems to be material; then, in any case, such Borrower shall promptly pay
Agent or such Lender, upon demand, such additional amount as will compensate
Agent or such Lender for such additional cost or such reduction, as the case may
be, provided that the foregoing shall not apply to increased costs which are
reflected in the Alternate Base Rate. Agent shall certify the amount of such
additional cost or reduced amount to such Borrower, and such certification shall
be prima facie evidence of such additional cost or reduced amount absent
manifest error.
2.13 CAPITAL ADEQUACY.
(a) In the event that, on or after the date of this Agreement,
any adoption of or any change in any applicable law, rule, regulation or
guideline regarding capital adequacy of Agent or any Lender or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by Agent or any Lender, or any corporation or bank
controlling Agent or any Lender and the office or branch where Agent or any
Lender makes or maintains any Eurodollar Rate Loan with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on Agent's or any Lender's capital as a consequence
of its obligations hereunder to a level below that which Agent or any Lender
would have achieved but for such adoption, change or compliance (taking into
consideration Agent's and each Lender's policies with respect to capital
adequacy) by an amount deemed by Agent or any Lender to be material, then, from
time to time, the Borrowers shall pay upon demand to Agent or such Lender such
additional amount or amounts as will compensate Agent or such Lender for such
reduction. In determining such amount or amounts, Agent or such Lender may use
any reasonable averaging or attribution methods. The protection of this Section
2.13 shall be available to Agent and Lenders regardless of any possible
contention of invalidity or
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inapplicability with respect to the applicable law, regulation or condition.
(b) A certificate of Agent setting forth such amount or amounts
as shall be necessary to compensate Agent or any Lender with respect to Section
2.13(a) when delivered to the Borrowers shall be conclusive absent manifest
error.
(c) The obligations of Borrowers under this Section 2.13 shall
survive for a period of one (1) year following the termination of this Agreement
and the Other Documents and payment of the Notes and the Advances.
2.14 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR. In the
event that Agent or any Lender shall have determined that:
(a) reasonable means do not exist for ascertaining the
Eurodollar Rate for any Interest Period; or
(b) Dollar deposits in the relevant amount and for the relevant
maturity are not available in the London interbank Eurodollar market, with
respect to an outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan,
or a proposed conversion of a Domestic Rate Loan into a Eurodollar Rate Loan;
THEN
Agent shall give the Borrowers prompt written, telephonic or telegraphic notice
of such determination. If such notice is given, (i) any such requested
Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless the Borrowers
shall notify the Agent, no later than 10:00 a.m. (New York City time) two (2)
Business Days prior to the date of such proposed borrowing, that their request
for such borrowing shall be cancelled or made as an unaffected type of
Eurodollar Rate Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan which
was to have been converted to an affected type of Eurodollar Rate Loan shall be
continued as or converted into a Domestic Rate Loan, or, if the Borrowers shall
notify Agent, no later than 10:00 a.m. (New York City time) two (2) Business
Days prior to the proposed conversion, shall be maintained as an unaffected type
of Eurodollar Rate Loan, and (iii) any outstanding affected Eurodollar Rate Loan
shall be converted into a Domestic Rate Loan, or, if Borrowers shall notify
Agent, no later than 10:00 a.m. (New York City time) two (2) Business Days prior
to the last Business Day of the then current Interest Period applicable to such
affected Eurodollar Rate Loan, shall be converted into an unaffected type of
Eurodollar Rate Loan, on the last Business Day of the then current Interest
Period for such affected Eurodollar Rate Loans. Until such notice has been
withdrawn, Lenders shall have no obligation to make an affected type of
Eurodollar Rate Loan or maintain outstanding affected Eurodollar Rate Loans and
Borrowers shall not have the right to convert a Domestic Rate Loan or an
unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar Rate
Loan.
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2.15 LETTERS OF CREDIT. Subject to the terms and conditions hereof,
Agent shall issue or cause the issuance of Standby Letters of Credit ("Letters
of Credit") PROVIDED, HOWEVER, that Agent will not be required to issue or cause
to be issued Letters of Credit (i) for Turbine to the extent that the face
amount of such Letters of Credit would then cause the outstanding Advances to
Turbine (with the requested Letter of Credit being deemed to be outstanding for
purposes of this calculation) to exceed the lesser of (A) the Maximum Loan
Amount MINUS outstanding Advances to or for the benefit of Greenwich and GTI,
Components, GASI and Engine Services or (B) the Turbine Formula Amount or (ii)
for Greenwich to the extent that the face amount of such Letters of Credit would
then cause the outstanding Advances to Greenwich (with the requested Letter of
Credit being deemed to be outstanding for purposes of this calculation) to
exceed the lesser of (A) the Maximum Loan Amount MINUS outstanding Advances to
or for the benefit of Turbine, GTI, Components, GASI and Engine Services or (B)
the Greenwich Formula Amount or (iii) for GTI to the extent the face amount of
such Letters of Credit would then cause the outstanding Advances to GTI (with
the requested Letter of Credit being deemed to be outstanding for purposes of
this calculation) to exceed the lesser of (A) the Maximum Loan Amount MINUS
outstanding Advances to or for the benefit of Greenwich, Turbine, Components,
GASI and Engine Services or (B) the GTI Formula Amount, (iv) for Components to
the extent the face amount of such Letters of Credit would then cause the
outstanding Advances to Components (with the requested Letter of Credit being
deemed to be outstanding for purposes of this calculation) to exceed the lesser
of (A) the Maximum Loan Amount MINUS outstanding Advances to or for the benefit
of Greenwich, Turbine, GTI, GASI and Engine Services or (B) the Components
Formula Amount, (v) for GASI to the extent the face amount of such Letters of
Credit would then cause the outstanding Advances to GASI (with the requested
Letter of Credit being deemed to be outstanding for purposes of this
calculation) to exceed the lesser of (A) the Maximum Loan Amount MINUS
outstanding Advances to or for the benefit of Greenwich, Turbine, GTI,
Components and Engine Services or (B) the GASI Formula Amount, (vi) for Engine
Services to the extent the face amount of such Letters of Credit would then
cause the outstanding Advances to Engine Services (with the requested Letter of
Credit being deemed to be outstanding for purposes of this calculation) to
exceed the lesser of (A) the Maximum Loan Amount MINUS outstanding Advances to
or for the benefit of Greenwich, Turbine, GTI, Components and GASI or (B) the
Engine Services Formula Amount. The maximum amount of outstanding Letters of
Credit shall not exceed $10,000,000 in the aggregate at any time. All
disbursements or payments related to Letters of Credit shall be deemed to be
Revolving Advances and shall bear interest at the Revolving Interest Rate for
Domestic Rate Loans (unless and until converted to a Eurodollar Rate Loan); and
to the extent not drawn upon, Letters of Credit that have not been drawn upon
shall not bear interest. Letters of Credit shall be subject to the terms and
conditions set forth in the Application and Agreement for Standby Letter of
Credit attached hereto as EXHIBIT 2.15.
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Upon the declaration by Agent of an Event of Default, Borrowers
will cause cash to be deposited and maintained in an account with Agent, as cash
collateral, in an amount equal to the undrawn amount of outstanding Letters of
Credit, and each Borrower hereby irrevocably authorizes Agent, in its
discretion, on such Borrower's behalf and in such Borrower's name, to open such
an account and to make and maintain deposits therein, or in an account opened by
such Borrower, in the amounts required to be made by such Borrower, out of the
proceeds of Receivables or other Collateral or out of any other funds of such
Borrower coming into Agent's possession at any time. Agent will invest such
cash collateral (less applicable reserves) in such short-term money-market items
as to which Agent and such Borrower mutually agree and the net return on such
investments shall be credited to such account and constitute additional cash
collateral. No Borrower may withdraw amounts credited to any such account
except upon (a) waiver or cure of the subject Event of Default, or (b) payment
and performance in full of all Obligations and termination of this Agreement.
2.16 ISSUANCE OF LETTERS OF CREDIT.
(a) Greenwich on behalf of itself or any other Borrower may
request Agent to issue or cause the issuance of a Letter of Credit by delivering
to Agent at the Payment Office, Bank's standard form of Application and
Agreement for Standby Letter of Credit (the "Letter of Credit Application")
completed to the satisfaction of Agent; and such other related certificates,
documents and other papers and information as Agent may reasonably request.
(b) Each Letter of Credit shall, among other things, (i)
provide for the payment of sight drafts when presented for honor thereunder in
accordance with the terms thereof and when accompanied by the documents
described therein and (ii) have an expiry date not later than twelve months
after such Letter of Credit's date of issuance and in no event later than five
(5) days prior to the last day of the Term. Each Letter of Credit Application
and each Letter of Credit shall be subject to the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any amendments or revisions thereof and, to the extent
not inconsistent therewith, the laws of the State of New York.
2.17 REQUIREMENTS FOR ISSUANCE OF LETTERS OF CREDIT.
(a) In connection with the issuance of any Letter of Credit,
Borrowers shall indemnify, save and hold Agent and each Lender harmless from any
loss, cost, expense or liability, including, without limitation, payments made
by Agent or any Lender, and expenses and reasonable attorneys' fees incurred by
Agent or any Lender arising out of, or in connection with, any Letter of Credit
to be issued or created. Borrowers shall be bound by Agent's, any Lender's or
any issuing bank's regulations and good faith interpretations of any Letter of
Credit issued or created for
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any Borrower's account, although this interpretation may be different from
Borrowers' own; and neither Agent, any Lender, the bank which opened the Letter
of Credit, nor any of its correspondents shall be liable for any error,
negligence, or mistakes, whether of omission or commission, in following any
Borrower's instructions or those contained in any Letter of Credit or of any
modifications, amendments or supplements thereto or in issuing or paying any
Letter of Credit, except for its own gross negligence or willful misconduct.
(b) Greenwich on behalf of itself or any other Borrower shall
authorize and direct any bank which issues a Letter of Credit to name such
Borrower as the "Account Party" therein and to deliver to Agent all instruments,
documents, and other writings and property received by the bank pursuant to the
Letter of Credit and to accept and rely upon Agent's instructions and agreements
with respect to all matters arising in connection with the Letter of Credit or
the application therefor.
(c) Each Lender shall be deemed to have irrevocably purchased
an undivided participation in Agent's credit support enhancement provided to the
issuing bank of any Letter of Credit and each Revolving Advance made as a
consequence of the issuance of a Letter of Credit and all disbursements
thereunder in an amount equal to such Lender's applicable Commitment Percentage
times the outstanding amount of the Letters of Credit and disbursements
thereunder. In the event that at the time a disbursement is made the unpaid
balance of Revolving Advances exceeds or would exceed, with the making of such
disbursement, the lesser of the Maximum Loan Amount or the Formula Amount, and
such disbursement is not reimbursed by Borrowers within two (2) Business Days,
Agent shall promptly notify each Lender and upon Agent's demand each Lender
shall pay to Agent such Lender's proportionate share of such unreimbursed
disbursement together with such Lender's proportionate share of Agent's
unreimbursed costs and expenses relating to such unreimbursed disbursement.
Upon receipt by Agent of a repayment from any Borrower of any amount disbursed
by Agent for which Agent had already been reimbursed by any of Lenders, Agent
shall deliver to each of the subject Lenders that Lender's pro rata share of
such repayment. Each Lender's participation commitment shall continue until the
last to occur of any of the following events: (A) Agent ceases to be obligated
to issue Letters of Credit hereunder; (B) no Letter of Credit issued hereunder
remains outstanding and uncancelled or (C) all Persons (other than the
applicable Borrower) have been fully reimbursed for all payments made under or
relating to Letters of Credit.
2.18 DEFAULTING LENDER.
(a) Notwithstanding anything to the contrary contained herein,
in the event any Lender (x) has refused (which refusal constitutes a breach by
such Lender of its obligations
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under this Agreement) to make available its portion of any Advance or (y)
notifies either Agent or any Borrower that it does not intend to make available
its portion of any Advance (if the actual refusal would constitute a breach by
such Lender of its obligations under this Agreement) (each, a "Lender Default"),
all rights and obligations hereunder of such Lender (a "Defaulting Lender") as
to which a Lender Default is in effect and of the other parties hereto shall be
modified to the extent of the express provisions of this Section 2.18 while such
Lender Default remains in effect.
(b) Advances shall be incurred PRO RATA from Lenders (the "Non-
Defaulting Lenders") which are not Defaulting Lenders based on their respective
Commitment Percentages, and no Commitment Percentage of any Lender or any PRO
RATA share of any Advances required to be advanced by any Lender shall be
increased as a result of such Lender Default. Amounts received in respect of
principal of any type of Advances shall be applied to reduce the applicable
Advances of each Lender PRO RATA based on the aggregate of the outstanding
Advances of that type of all Lenders at the time of such application; provided,
that, such amount shall not be applied to any Advances of a Defaulting Lender at
any time when, and to the extent that, the aggregate amount of Advances of any
Non-Defaulting Lender exceeds such Non-Defaulting Lender's Commitment Percentage
of all Advances then outstanding.
(c) A Defaulting Lender shall not be entitled, during the
continuance of such Lender Default, to give instructions to Agent or to approve,
disapprove, consent to or vote on any matters relating to this Agreement and the
Other Documents. All amendments, waivers and other modifications of this
Agreement and the Other Documents may be made without regard to a Defaulting
Lender and, solely for purposes of the definition of "Required Lenders" and
Section 14.2(b) hereof, a Defaulting Lender shall be deemed not to be a Lender
and not to have Advances outstanding.
(d) Other than as expressly set forth in this Section 2.18, the
rights and obligations of a Defaulting Lender (including the obligation to
indemnify Agent) and the other parties hereto shall remain unchanged. Nothing
in this Section 2.18 shall be deemed to release any Defaulting Lender from its
obligations under this Agreement and the Other Documents, shall alter such
obligations, shall operate as a waiver of any default by such Defaulting Lender
hereunder, or shall prejudice any rights which Borrower, Agent or any Lender may
have against any Defaulting Lender as a result of any default by such Defaulting
Lender hereunder.
(e) In the event a Defaulting Lender retroactively cures to the
satisfaction of Agent the breach which caused a Lender to become a Defaulting
Lender, such Defaulting Lender shall no longer be a Defaulting Lender and shall
be treated as a Lender under this Agreement.
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(f) If a Lender Default shall occur, any Lender or Lenders may
commit to make Advances in an amount necessary to meet Borrowers' request. In
such event, the Defaulting Lender's Commitment Percentage of the Advances shall
be terminated and its Commitment Percentage of the Advances outstanding (prior
to such additional Advances being made by the other Lender or Lenders) shall be
repaid by the Borrowers provided Borrowers shall not be obligated to pay an
early termination fee to such Defaulting Lender.
III. INTEREST AND FEES.
3.1 INTEREST. Interest on Revolving Advances shall be payable in
arrears on the last day of each month with respect to Domestic Rate Loans and,
with respect to any Eurodollar Rate Loan, at the end of the Interest Period
relating to such Eurodollar Rate Loan. Interest charges for Domestic Rate Loans
shall be computed on the actual average of daily Revolving Advances outstanding
during the month (the "Monthly Advances") at a rate per annum equal to the
applicable Revolving Interest Rate. Whenever, subsequent to the date of this
Agreement, the Alternate Base Rate is increased or decreased, the Revolving
Interest Rate applicable to Domestic Rate Loans shall be similarly changed
without notice or demand of any kind by an amount equal to the amount of such
change in the Alternate Base Rate during the time such change or changes remain
in effect. Upon and after the declaration by Agent of an Event of Default, and
during the continuation thereof, the Revolving Advances shall bear interest at
the Revolving Interest Rate plus two (2%) percent per annum and fees on
outstanding Letters of Credit shall be calculated at three and one-half (3.50%)
percent (the "Default Rate").
3.2 INTENTIONALLY OMITTED.
3.3 UNUSED FACILITY FEE. On the first day of each calendar month
commencing on the first day of the first month following the Effective Date,
Borrowers shall pay to Agent an unused facility fee initially, a rate per annum
equal to .3% of the average daily unused portion of the Maximum Loan Amount;
PROVIDED, however, the unused facility fee shall be amended as provided below,
commencing on the later to occur of (i) the last day of the third fiscal quarter
after the Effective Date and (ii) March 31, 1997 and at the end of each fiscal
quarter thereafter based upon the ratio of Funded Debt to EBITDA as reflected in
the financial statements (x) delivered to Agent pursuant to Section 9.7 of this
Agreement with respect to the first three (3) fiscal quarters of any fiscal year
and (y) delivered to Agent pursuant to Section 9.8 of this Agreement with
respect to the last fiscal quarter of any fiscal year:
Ratio of Indebtedness to EBITDA Unused Facility Fee
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less than 3.0 to 1.0 0.200%
less than 3.50 and equal to or greater than 3.0 to 1.0 0.200%
less than 4.50 and equal to or greater than 3.50 to 1.0 0.300%
equal to or greater than 4.50 to 1.0 0.375%
The foregoing ratio shall be determined for Borrowers on a consolidated
basis. Notwithstanding the foregoing, the unused facility fee shall not be
reduced at such time as an Event of Default or Incipient Event of Default has
occurred and is continuing but shall be reduced (if applicable) when such Event
of Default or Incipient Event of Default has been cured or waived.
3.4 LETTER OF CREDIT.
Borrowers shall pay Agent (i) for the pro-rata benefit of Lenders for
issuing or causing the issuance of a Letter of Credit, a fee computed at a rate
per annum of one and one-half percent (1-1/2%) on the original face amount
thereof ("Letter of Credit Fees"), (ii) Bank's other customary charges payable
in connection with Letters of Credit, as in effect from time to time (which
charges shall be furnished to Borrowers by Agent upon request). Such fees and
charges shall be payable on the opening of each Letter of Credit, and thereafter
on the last day of each month. Any such charge in effect at the time of a
particular transaction shall be the charge for that transaction, notwithstanding
any subsequent change in Bank's prevailing charges for that type of transaction.
All Letter of Credit Fees payable hereunder shall be deemed earned in full on
the date when the same are due and payable hereunder and shall not be subject to
rebate or proration upon the termination of this Agreement for any reason.
3.5 COMPUTATION OF INTEREST AND FEES. Interest and fees hereunder
shall be computed on the basis of a year of 360 days and for the actual number
of days elapsed; PROVIDED, HOWEVER, Advances bearing interest based on the Prime
Rate shall be computed on the basis of a year of 365(6) days and for the actual
number of days elapsed. If any payment to be made hereunder becomes due and
payable on a day other than a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and interest thereon shall then be
payable in respect of the period of such extension. The fees set forth in
Sections 3.2, 3.3 and 3.4 shall, unless contrary instructions are received in
writing by Agent from Greenwich, be charged to the respective loan accounts of
each Borrower as follows: [25% to Greenwich's account, 10% to Turbine's
account, __% to Engine Services, __% to GASI and __% to Components.
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3.6 MAXIMUM CHARGES. In no event whatsoever shall interest and other
charges charged hereunder exceed the highest rate permissible under law which a
court of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that a court determines that Agent or any Lender has
received interest and other charges hereunder in excess of the highest lawful
rate applicable hereto, such excess interest shall be first applied to any
unpaid principal balance owed by Borrowers, and if the then remaining excess
interest is greater than the previously unpaid principal balance, Lenders shall
promptly refund such excess amount to the Borrowers and the provisions hereof
shall be deemed amended to provide for such permissible rate.
IV. COLLATERAL: GENERAL TERMS
4.1 ACKNOWLEDGEMENT AND GRANT OF SECURITY INTERESTS.
(a) Each Borrower hereby acknowledges, confirms and agrees that
Agent for the ratable benefit of Lenders has and shall continue to have a lien
upon and security interest in all Collateral heretofore granted to BNYCC
pursuant to the Existing Loan Agreement to secure the Obligations, and, to the
extent not otherwise granted thereunder or under the Other Documents or
otherwise granted to or held by BNYCC, Borrowers hereby pledge and assign to
Agent for the ratable benefit of Lenders and grant to Agent for the ratable
benefit of Lenders a continuing security interest in, all of the Collateral,
wherever located, whether in any Borrower's possession or in the possession and
control of a third party for any Borrower's or Agent's or any Lender's account.
All of each Borrower's ledger sheets, files, records, books of account, business
papers and documents relating to the Collateral shall, until delivered to or
removed by Agent, be kept by such Borrower in trust for Agent for the ratable
benefit of Lenders.
(b) The liens and security interests of Agent for the ratable
benefit of Lenders in the Collateral shall be deemed to be continuously
perfected from the earliest date of the granting of such liens and security
interests, whether hereunder, under the Other Documents, or under the Existing
Loan Agreement.
4.2 PERFECTION OF SECURITY INTEREST. Each Borrower shall take all
action that may be necessary or desirable, or that Agent may reasonably request,
so as at all times to maintain the validity, perfection, enforceability and
first priority of Agent's security interest in the Collateral or to enable Agent
to protect, exercise or enforce its rights hereunder and in the Collateral,
including, but not limited to (i) immediately discharging all Liens on
Collateral other than Permitted Encumbrances, (ii) obtaining landlords' or
mortgagees' lien waivers with respect to any premises leased or purchased by any
Borrower after the Initial Closing Date, (iii) delivering to Agent, endorsed or
accompanied by such instruments of assignment as Agent may reasonably specify,
and stamping or marking, in such manner as Agent may reasonably specify, any and
all chattel paper, instruments, letters of credits
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and advices thereof and documents evidencing or forming a part of the
Collateral, (iv) entering into custodial arrangements satisfactory to Agent, and
(v) executing and delivering financing statements, instruments of pledge,
mortgages, notices and assignments, in each case in form and substance
satisfactory to Agent, relating to the creation, validity, perfection,
maintenance or continuation of Agent's security interest in the Collateral under
the Uniform Commercial Code or other applicable law. All reasonable and
necessary charges, expenses and fees that Agent may incur in doing any of the
foregoing in the good faith exercise of its discretion, and any local taxes
relating thereto, shall be charged to the applicable Borrower's account and
added to the Obligations, or, at Agent's option, shall be paid to Agent
immediately upon demand.
4.3 DISPOSITION OF COLLATERAL. Each Borrower will safeguard and
protect all Collateral for Agent's general account and make no disposition
thereof whether by sale, lease or otherwise without Agent's prior written
consent which shall not be unreasonably withheld or delayed, except that any
Borrower may, without Agent's consent, sell Inventory in the ordinary course of
business.
4.4 PRESERVATION OF COLLATERAL. Agent shall have, and is hereby
granted, a right of ingress and egress to the places where the Collateral is
located, and may proceed over and through any of Borrowers' owned or leased
property In addition to the rights and remedies set forth in Section 11.1
hereof, Agent may at any time following the occurrence and during the
continuance of an Event of Default take such steps as Agent deems necessary to
protect its security interest in and to preserve the Collateral including (a)
the hiring of such security guards or the placing of other security protection
measures as Agent may deem appropriate; (b) employing and maintaining at any of
Borrowers' premises a custodian who shall have full authority to do all acts
necessary to protect Agent's security interest in the Collateral; (c) leasing
warehouse facilities to which Agent may move all or part of the Collateral; and
(d) subject to the provisions of the Intercreditor Agreement, using any of
Borrowers' owned or leased lifts, hoists, trucks and other facilities or
equipment for handling or removing the Collateral. Each Borrower shall cooperate
fully with all of Agent's efforts to preserve the Collateral and will take such
actions to preserve the Collateral as Agent may direct. All of Agent's
reasonable and necessary expenses of preserving the Collateral, including any
expenses relating to the bonding of a custodian, shall be charged to the
applicable Borrower's account as an Advance and added to the Obligations.
4.5 OWNERSHIP OF COLLATERAL. With respect to the Collateral, at the
time the Collateral became or becomes subject to the security interest granted
pursuant to the Existing Loan Agreement or Section 4.1 hereof, as the case may
be: (a) each Borrower shall be the sole owner of and fully authorized and able
to transfer, pledge and/or grant a first security interest in each
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and every item of its respective Collateral to Agent; and, except for Permitted
Encumbrances, the Collateral shall be free and clear of all Liens, Claims,
Charges and encumbrances whatsoever; (b) each document and agreement executed by
each Borrower or delivered to Agent or any Lender on behalf of each Borrower in
connection with this Agreement shall be true and correct in all material
respects as of the date thereof; (c) all signatures and endorsements of each
Borrower that appear on such documents and agreements shall be genuine and each
Borrower shall have full capacity to execute same; and (d) Borrowers' Inventory
shall be located as set forth on EXHIBIT 4.5 and shall not be removed from such
location(s) (except with respect to the sale of Inventory in the ordinary course
of business) unless Agent shall have received thirty (30) days' prior written
notice of such removal.
4.6 DEFENSE OF AGENT'S INTERESTS. Until (a) payment and performance
in full of all of the Obligations and (b) termination of this Agreement, Agent's
interests in the Collateral shall continue in full force and effect. During
such period none of the Borrowers shall, without Agent's prior written consent,
pledge, sell (except Inventory in the ordinary course of business), assign,
transfer, create or suffer to exist a security interest in, Lien, Claim or
Charge upon or encumber or allow or suffer to be encumbered in any way except
for Permitted Encumbrances, any part of the Collateral. Except as respects
Permitted Encumbrances, each Borrower shall defend Agent's interests in the
Collateral against any and all Persons whatsoever. At any time following the
declaration and during the continuance of an Event of Default hereunder, Agent
shall have the right to take possession of the indicia of the Collateral and the
Collateral using all legally permitted methods in whatever physical form
contained, including without limitation: labels, stationery, documents,
instruments and advertising materials. If Agent exercises this right to take
possession of the Collateral, each Borrower shall, upon demand, assemble it in
the best manner possible and make it available to Agent at a place reasonably
convenient to Agent; PROVIDED, that any request by Agent shall be made in a
commercially reasonable manner. In addition, with respect to all Collateral,
Agent and Lenders shall be entitled to all of the rights and remedies set forth
herein and further provided by the Uniform Commercial Code or other applicable
law. Following the occurrence and during the continuation of an Event of
Default, each Borrower shall, and Agent may, at its option, instruct all
suppliers, carriers, forwarders, warehouses or others receiving or holding cash,
checks, Inventory, documents or instruments in which Agent holds a security
interest to deliver same to Agent and/or subject to Agent's order. If any of
the foregoing shall, at any time, come into any Borrower's possession, they, and
each of them, shall be held by such Borrower in trust as Agent's trustee, and
such Borrower will immediately deliver them to Agent in their original form
together with any necessary endorsement.
4.7 BOOKS AND RECORDS. Each Borrower (a) shall keep proper books of
record and account in which full, true and correct
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entries will be made of all dealings or transactions of or in relation to its
business and affairs; (b) set up on its books accruals with respect to all
taxes, assessments, charges, levies and claims; and (c) on a reasonably current
basis set up on its books, from its earnings, allowances against doubtful
Receivables, advances and investments and all other proper accruals (including
without limitation by reason of enumeration, accruals for premiums, if any, due
on required payments and accruals for depreciation, obsolescence, or
amortization of properties), which should be set aside from such earnings in
connection with its business. All determinations pursuant to this subsection
shall be made in accordance with, or as required by, GAAP consistently applied.
4.8 FINANCIAL DISCLOSURE. Each Borrower hereby irrevocably authorizes
and directs all accountants and auditors employed by such Borrower at any time
during the term of this Agreement to exhibit and deliver to Agent and each
Lender copies of any of the Borrowers' financial statements, trial balances or
other accounting records including work papers of any sort in the accountant's
or auditor's possession, and to disclose to Agent and each Lender any
information such accountants may have concerning the Borrowers' financial status
and business operations. Each Borrower hereby authorizes all federal, state and
municipal authorities to furnish to Agent and each Lender copies of reports or
examinations relating to the Borrowers, whether made by the Borrowers or
otherwise; PROVIDED, HOWEVER, that Agent and each Lender will attempt to obtain
such information or materials directly from the Borrowers prior to obtaining
such information or materials from such accountants or governmental authorities.
Any failure by the accountants or governmental authorities to comply with
information requests of Agent or any Lender shall not be deemed an Event of
Default hereunder unless such failure to comply is a result of instructions by
any Borrower which are contrary to the provisions of this Section 4.8. Agent
and each Lender shall exercise its rights hereunder in a commercially reasonable
manner.
4.9 COMPLIANCE WITH LAWS. Each Borrower shall in all material
respects comply with all acts, rules, regulations and orders of any legislative,
administrative or judicial body or official applicable to the Collateral or any
part thereof or to the operation of such Borrower's business the non-compliance
with which would have a material adverse effect on the Collateral, or the
operations, business or condition (financial or otherwise) of such Borrower.
Any Borrower may, however, contest or dispute any acts, rules, regulations,
orders and directions of those bodies or officials in any reasonable manner,
provided that any related Lien or Charge which is or might be asserted with
respect thereto (if applicable to the Collateral) is inchoate or stayed and
sufficient reserves are established to the reasonable satisfaction of Agent so
as not to derogate from or against and so as to protect, Agent's lien on or
security interest in the Collateral.
4.10 INSPECTION OF PREMISES. At all reasonable times Agent or any
Lender shall have full access to and the right to
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audit, check, inspect and make abstracts and copies from the Borrowers' books,
records, audits, correspondence and all other papers relating to the Collateral
and the operation of Borrowers' business. Agent or any Lender may enter upon
any of the Borrowers' premises at any time during business hours and at any
other reasonable time, and from time to time, for the purpose of inspecting the
Collateral and any and all records pertaining thereto and the operation of
Borrowers' business.
4.11 INSURANCE. Borrowers shall bear the full risk from any loss of
any nature whatsoever with respect to the Collateral. At its own cost and
expense in amounts and with carriers acceptable to Agent (which acceptance shall
not be unreasonably withheld), each Borrower shall (a) keep all its insurable
properties and properties in which such Borrower has an interest insured against
the hazards of fire, flood, sprinkler leakage, those hazards covered by extended
coverage insurance and such other hazards, including, without limitation,
business interruption insurance and for such amounts, as is customary in the
case of companies engaged in a business similar to such Borrower provided that
such insurance shall be for at least [$____________] in the aggregate for all of
the Borrowers; (b) maintain a bond in such amounts as is customary in the case
of companies engaged in a business similar to such Borrower insuring against
larceny, embezzlement or other criminal misappropriation of insured's officers
and employees who may either singly or jointly with others at any time have
access to the assets or funds of any Borrower either directly or through
authority to draw upon such funds or to direct generally the disposition of such
assets; (c) maintain product liability insurance against claims for personal
injury, death or property damage suffered by others in an amount not less than
the maximum amount which Borrowers are able to obtain; PROVIDED, that such
insurance shall not be for an amount less than [$100,000,000?] in the aggregate
for all of the Borrowers or more than [$250,000,000?] in the aggregate for all
of the Borrowers; and PROVIDED, FURTHER, that Borrowers' inability to obtain
insurance in an amount equal to [$250,000,000] in the aggregate for all
Borrowers is due to market conditions and is not a result of Borrowers' actions
or omissions; (d) maintain all such worker's compensation or similar insurance
as may be required under the laws of each state or jurisdiction in which any
Borrower is engaged in business; (e) furnish Agent with (i) copies of all
policies and evidence of the maintenance of such policies by the renewal thereof
at least thirty (30) days before any expiration date, and (ii) appropriate loss
payable endorsements in form and substance satisfactory to Agent, naming Agent
as loss payee as its interests may appear with respect to all insurance coverage
referred to in clauses (a) and (b) above and as an additional insured with
respect to the insurance coverage referred to in clauses (c) and (d) above, and
in either case providing (A) that all proceeds thereunder in respect of the
Collateral shall be payable to Agent, (B) that no such insurance shall be
affected by any act or neglect of the insured or owner of the property described
in such policy, and (C) that such policy and loss payable clauses may not be
cancelled,
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amended or terminated unless at least thirty (30) days' prior written notice is
given to Agent. In the event of any loss thereunder, the carriers named therein
hereby are directed by Agent and Borrowers to make payment for such loss to
Agent and not to the Borrowers and Agent jointly. If any insurance losses are
paid by check, draft or other instrument payable to the Borrowers and Agent
jointly, Agent may endorse any Borrower's name thereon and do such other things
as Agent may deem advisable to reduce the same to cash. All loss recoveries
received by Agent upon any such insurance may be applied to the Obligations, in
such order as Agent in its sole discretion shall determine; PROVIDED, HOWEVER,
Agent shall remit to Borrowers any loss recoveries received by Agent with
respect to Borrowers' insurance coverage referred to in clauses (c) and (d)
above which are paid to Agent other than in its capacity as an additional
insured under said policies. Any surplus shall be paid by Agent to Borrowers or
applied as may be otherwise required by law. Any deficiency in the amount of
insurance proceeds received when compared to the value of the Collateral the
loss of which gave rise to such insurance proceeds shall be paid by the
Borrowers to Agent, on demand. Anything hereinabove to the contrary
notwithstanding (i) Agent shall permit each Borrower to adjust and compromise
claims under insurance coverage provided that no Event of Default shall have
been declared and be continuing and (ii) Agent shall promptly remit to Borrowers
insurance proceeds received by Agent during any calendar year under insurance
policies procured and maintained by Borrowers which insure Borrowers' insurable
Collateral to the extent such insurance proceeds do not exceed $2,000,000 per
occurrence provided, (x) no Event of Default shall have been declared and be
continuing, (y) Borrowers shall use such insurance proceeds to repair, replace
or restore the insurable Collateral which was the subject of the insurable loss
and for no other purpose and (z) Agent shall have obtained a perfected security
interest in such repaired, replaced or restored Collateral. In the event the
amount of insurance proceeds received by Agent for any occurrence as aforesaid
exceeds [$750,000] and no Event of Default shall have been declared and be
continuing, Agent shall place such proceeds in an interest-bearing account and
such proceeds shall be remitted to Borrowers from time to time to the extent (a)
Borrowers shall submit invoices to Agent with respect to the repair, replacement
or restoration of the insurable Collateral which was the subject of the
insurable loss, (b) Borrowers shall use such insurance proceeds to repair,
replace or restore the insurable Collateral which was the subject of the
insurable loss and for no other purpose, (c) the repair, replacement or
restoration of the subject Collateral must be capable of being accomplished
during the period of time in which any Borrower's business interruption
insurance is in effect and (d) each Borrower shall have delivered to Agent a
revised Business Plan in form and substance satisfactory to Agent evidencing
such Borrower's ability to continue to operate its business in compliance with
the provisions of Sections 6.5, 6.6 and 6.7 hereof and without the occurrence of
any other Event of Default hereunder. Following the declaration and during the
continuance of an Event of Default
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hereunder, Agent shall not be obligated to remit the insurance proceeds to
Borrowers.
4.12 FAILURE TO MAINTAIN INSURANCE. If any Borrower fails to obtain
insurance as hereinabove provided, or to keep the same in force, Agent may
obtain such insurance and pay the premium therefor for such Borrower's account,
and charge such Borrower's account therefor and such expenses so paid shall be
charged to such Borrower's account as an Advance and added to the Obligations.
4.13 PAYMENT OF TAXES. Each Borrower will pay, before becoming
delinquent, all taxes, assessments and other Charges or Claims lawfully levied
or assessed upon such Borrower or any of the Collateral including, without
limitation, real and personal property taxes, assessments and charges and all
franchise, income, employment, social security benefits, withholding, and sales
taxes. If any tax by any governmental authority is or may be imposed on Agent or
any Lender or, as a result of any transaction between Borrowers, any Agent and
Lender, Agent or any Lender may be required to withhold or pay such a tax or, if
any taxes, assessments, or other Charges remain unpaid after the delinquency
date or if any Claim shall be made which, in Agent's opinion, may possibly
create a valid Lien, Charge or Claim on the Collateral, Agent may, concurrently
with giving notice to Borrowers, pay the taxes, assessments, Liens, Charges or
Claims and each Borrower hereby indemnifies and holds Agent harmless in respect
thereof except for gross (not mere) negligence or willful misconduct. The
amount of any payment by Agent or any Lender under this Section 4.13 shall be
charged to the applicable Borrower's account as an Advance and added to the
Obligations and, until the applicable Borrower shall furnish Agent with an
indemnity therefor (or supply Agent with evidence satisfactory to Agent that due
provision for the payment thereof has been made), Agent may hold without
interest any balance standing to any Borrower's credit and Agent shall retain
its security interest in any and all Collateral held by Agent.
4.14 PAYMENT OF LEASEHOLD OBLIGATIONS. Each Borrower shall at all
times pay, before becoming delinquent, its rental obligations under all leases
under which it is a tenant, and shall otherwise comply, in all material
respects, with all other terms of such leases and keep them in full force and
effect and, at Agent's request, will provide evidence of having done so.
4.15 RECEIVABLES.
(a) NATURE OF RECEIVABLES. Each of the Receivables shall be a
bona fide and valid account representing a bona fide obligation of the Customer
therein named, for a fixed sum as set forth in the invoice relating thereto
(provided immaterial or unintentional invoice errors shall not be deemed to be a
breach hereof and Eligible Unbilled Receivables do not have any invoices
relating thereto) with respect to an absolute sale or lease and delivery of
goods upon stated terms of the applicable Borrower, or
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work, labor or services theretofore rendered by such Borrower and as of the date
each Receivable is created. Same shall be due and owing in accordance with each
Borrower's standard terms of sale without dispute, setoff or counterclaim
except, as may be stated on the accounts receivable schedules delivered by the
Borrower to Agent.
(b) SOLVENCY OF CUSTOMERS. To the best of each Borrower's
knowledge, each Customer, as of the date each Receivable is created, is and will
be solvent and able to pay all Receivables on which the Customer is obligated in
full when due or with respect to such Customers of Borrowers who are not solvent
such Borrower has set up on its books and in its financial records bad debt
reserves adequate to cover such Receivables or has collateral from such Customer
sufficient to cover such Receivables.
(c) LOCATIONS OF BORROWER. Each Borrower's chief executive
office is located at 4590 N.W. 36th Street, Building 23, Miami, Florida 33122.
Until written notice is given to Agent by any Borrower of any other office at
which it keeps its records pertaining to Receivables, all such records shall be
kept at such executive office.
(d) COLLECTION OF RECEIVABLES. Until the Borrowers' authority
to do so is terminated by Agent (which notice Agent may give at any time
following the occurrence and during the continuance of an Event of Default),
each Borrower will, at such Borrower's sole cost and expense, but on Agent's
behalf and for the account of Agent, collect as Agent's property and in trust
for Agent all amounts received on Receivables, and shall not commingle such
collections with such Borrower's funds or use the same except to pay
Obligations. Each Borrower shall, upon request, deliver to Agent in original
form and on the date of receipt thereof, all checks, drafts, notes, money
orders, acceptances, cash and other evidences of Indebtedness.
(e) NOTIFICATION OF ASSIGNMENT OF RECEIVABLES. At any time
following the occurrence and during the continuance of an Event of Default,
Agent shall have the right to send notice of the assignment of, and Agent's
security interest in, the Receivables to any and all Customers or any third
party holding or otherwise concerned with any of the Collateral. Thereafter,
Agent shall have the sole right to collect the Receivables, take possession of
the Collateral, or both. Agent's actual collection expenses, including, but not
limited to, stationery and postage, telephone and telegraph, secretarial and
clerical expenses and the salaries of any collection personnel used for
collection, may be charged to each Borrower's account and added to the
Obligations.
(f) POWER OF AGENT TO ACT ON EACH BORROWER'S BEHALF. Agent
shall have the right to receive, endorse, assign and/or deliver in the name of
Agent or the applicable Borrower any and all checks, drafts and other
instruments for the payment of money relating to the Receivables, and each
Borrower hereby waives
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notice of presentment, protest and non-payment of any instrument so endorsed.
Each Borrower hereby constitutes Agent or its designee as the Borrower's
attorney with power (i) to endorse such Borrower's name upon any notes,
acceptances, checks, drafts, money orders or other evidences of payment or
Collateral; (ii) to sign such Borrower's name on any invoice or bill of lading
relating to any of the Receivables, drafts against Customers, assignments and
verifications of Receivables; (iii) to send verifications of Receivables to any
Customer; (iv) to sign such Borrower's name on all financing statements or any
other documents or instruments deemed necessary or appropriate by Agent to
preserve, protect, or perfect Agent's interest in the Collateral and to file
same; (v) following the occurrence and during the continuance of an Event of
Default, to demand payment of the Receivables; (vi) following the occurrence and
during the continuance of an Event of Default, to enforce payment of the
Receivables by legal proceedings or otherwise: (vii) following the occurrence
and during the continuance of an Event of Default, to exercise all of each
Borrower's rights and remedies with respect to the collection of the Receivables
and any other Collateral; (viii) following the occurrence and during the
continuance of an Event of Default, to settle, adjust, compromise, extend or
renew the Receivables; (ix) following the occurrence and during the continuance
of an Event of Default, to settle, adjust or compromise any legal proceedings
brought to collect Receivables; (x) to prepare, file and sign each Borrower's
name on a proof of claim in bankruptcy or similar document against any Customer
if such Borrower has failed to do so no later than thirty (30) days prior to any
bar date; (xi) to prepare, file and sign each Borrower's name on any notice of
Lien, assignment or satisfaction of Lien or similar document in connection with
the Receivables if such Borrower has failed to do so no later than thirty (30)
days prior to the expiration of any applicable time period; and (xii) to do all
other acts and things necessary to carry out this Agreement. All acts of said
attorney or designee are hereby ratified and approved, and said attorney or
designee shall not be liable for any acts of omission or commission nor for any
error of judgment or mistake of fact or of law, unless done willfully and
maliciously or by gross (not mere) negligence; this power being coupled with an
interest is irrevocable while any of the Obligations remain unpaid. Agent shall
have the right at any time following the declaration and during the continuance
of an Event of Default to change the address for delivery of mail addressed to
any Borrower to such address as Agent may designate.
(g) NO LIABILITY. Neither Agent nor any Lender shall, under
any circumstances or in any event whatsoever, have any liability for any error
or omission or delay of any kind occurring in the settlement, collection or
payment of any of the Receivables or any instrument received in payment thereof,
or for any damage resulting therefrom except for its own willful misconduct or
gross (not mere) negligence. Following the occurrence and during the
continuance of an Event of Default, Agent may, without notice or consent from
any Borrower, sue upon or otherwise collect, extend the time of payment of,
compromise or settle for cash, credit or
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upon any terms any of the Receivables or any other securities, instruments or
insurance applicable thereto and/or release any obligor thereof. Agent is
authorized and empowered to accept, following the occurrence and during the
continuance of an Event of Default, the return of the goods represented by any
of the Receivables, without notice to or consent by any Borrower, all without
discharging or in any way affecting any Borrower's liability hereunder.
(h) ESTABLISHMENT OF AN AGENCY ACCOUNT. All proceeds of
Collateral shall, at the direction of Agent, be deposited by each Borrower into
a separate agency account (collectively, "Agency Accounts") as Agent may require
pursuant to an arrangement with such bank(s) (the "Depository Banks") as may be
selected by each Borrower and be acceptable to Agent. The Depository Bank shall
receive, in writing, irrevocable instructions directing the Depository Bank to
transfer such funds so deposited to Agent by wire transfer to specified
account(s) of Agent. All funds deposited in the Agency Accounts shall
immediately become the property of Agent and each Borrower shall obtain the
agreement by the Depository Bank to waive any offset rights against the funds so
deposited. Neither Agent nor any Lender assumes any responsibility for such
Agency Account arrangements, including without limitation, any claim of accord
and satisfaction or release with respect to deposits accepted by any bank
thereunder. Each Borrower will maintain an operating account with a Depository
Bank. In the event that any check(s) deposited in the Agency Accounts is
returned unpaid, the amount thereof shall be charged by such Depository Bank to
such operating account and, to the extent that funds are not available in the
operating account, such Borrower shall be solely responsible for reimbursing the
Depository Bank. Each Borrower shall issue, to the respective Depository Bank,
an irrevocable letter of instruction directing such Depository Bank that, to the
extent that such Borrower shall receive wire transfers representing proceeds of
Collateral in such operating account, such funds shall be automatically and
immediately transferred to the applicable Agency Account.
4.16 INVENTORY. All Inventory produced by each Borrower has been, and
will be produced, in accordance with the Federal Fair Labor Standards Act of
1938, as amended, and all rules, regulations and orders thereunder.
4.17 EXCULPATION OF LIABILITY. Except as set forth in Section 4.15(f)
hereof, nothing herein contained shall be construed to constitute Agent or any
Lender as any Borrower's agent for any purpose whatsoever, nor shall Agent or
any Lender be responsible or liable for any shortage, discrepancy, damage, loss
or destruction of any part of the Collateral wherever the same may be located
and regardless of the cause thereof except for its own gross (not mere)
negligence or willful misconduct. Neither Agent nor any Lender does by anything
herein or in any Other Document or in any assignment or otherwise, assume any of
the Borrowers' obligations under any contract or agreement assigned to Agent or
such Lender,
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and neither Agent nor any Lender shall be responsible in any way for the
performance by any Borrower of any of the terms and conditions thereof except
for its own willful misconduct or gross (not mere) negligence.
4.18 ENVIRONMENTAL MATTERS.
(a) Each Borrower will maintain the Real Property in
substantial compliance with all Environmental Laws and it will not place or
suffer or permit to be placed any Hazardous Substances on the Real Property
except as not prohibited by applicable law or appropriate governmental
authorities and which are necessary for the operation of the commercial business
of such Borrower or of its tenants.
(b) Each Borrower will maintain its current system to assure
and monitor continued compliance with all applicable Environmental Laws which
system includes periodic reviews of such compliance.
(c) Each Borrower will dispose of any and all Hazardous Waste
generated at the Real Property only at facilities and with carriers that
maintain valid permits under any applicable Environmental Laws. Each Borrower
shall use its best efforts to obtain certificates of disposal, such as hazardous
waste manifest receipts, from all treatment, transport, storage or disposal
facilities or operators employed by such Borrower in connection with the
transport or disposal of any Hazardous Waste generated at the Real Property.
(d) In the event any Borrower comes into possession of, gives
or receives notice of any Release or threat of Release of a reportable quantity
of any Hazardous Substances at the Real Property or any other site used by such
Borrower to dispose of Hazardous Substances (any such event being hereinafter
referred to as a "Hazardous Discharge") or receives any notice of violation,
request for information or notification that it is potentially responsible for
investigation or cleanup of environmental conditions at the Real Property (or
any other site used by such Borrower to dispose of Hazardous Substances), demand
letter or complaint, order, citation, or other written notice with regard to any
Hazardous Discharge or violation of Environmental Laws affecting the Real
Property (or any other site used by such Borrower to dispose of Hazardous
Substances) or such Borrower's interest therein (any of the foregoing is
referred to herein as an "Environmental Complaint") from any local, state or
federal authority or agency with enforcement rights, including any state agency
responsible in whole or in part for environmental matters in the state in which
the Real Property is located or the United States Environmental Protection
Agency (any such person or entity hereinafter the "Authority"), then such
Borrower shall, within five (5) Business Days, give written notice of same to
Agent detailing non-privileged and non-confidential facts and circumstances of
which such Borrower is aware giving rise to the
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Hazardous Discharge or Environmental Complaint and shall forward copies of
correspondence between the Borrower and the Authority regarding such claims to
Agent until the claim is settled. Each Borrower shall promptly forward to Agent
copies of all documents and reports concerning a Hazardous Discharge at the Real
Property that such Borrower is required to file under any Environmental Laws.
Such information is to be provided to allow Agent to protect its security
interest in the collateral assignment of Borrowers' lease interest in the Real
Property and is not intended to create nor shall it create any obligation upon
Agent or any Lender with respect thereto.
(e) Each Borrower shall respond promptly to any Hazardous
Discharge and within thirty (30) days of receipt of any Environmental Complaint
and take all necessary action in order to comply with all applicable
Environmental Laws and to avoid subjecting the Collateral or Real Property to
any Lien relating to a failure to comply with Environmental Laws; PROVIDED,
HOWEVER, if such compliance cannot reasonably be completed within such thirty
(30) day period, such Borrower shall commence such necessary action within such
thirty (30) day period and shall thereafter diligently and expeditiously proceed
to fully comply in all respects and in a timely fashion with all Environmental
Laws. If any Borrower shall fail to respond promptly to any Hazardous Discharge
or shall fail to respond within a reasonable period of time to any Environmental
Complaint or any Borrower shall fail to diligently and expeditiously proceed to
comply in a timely fashion with any of the requirements of any Environmental
Laws, Agent, on behalf of Lenders, may, in its sole and absolute discretion, but
without the obligation to do so, for the sole purpose of protecting Agent's
interest in Collateral: (A) give such notices or (B) enter onto the Real
Property (or authorize third parties to enter onto the Real Property) and take
such actions as Agent (or such third parties as directed by Agent) deem
reasonably necessary or advisable, to clean up, remove, mitigate or otherwise
deal with any such Hazardous Discharge or Environmental Complaint in a
commercially reasonable manner. All reasonable costs and expenses incurred by
Agent or any Lender (or such third parties) in the exercise of any such rights,
including any sums paid in connection with any judicial or administrative
investigation or proceedings, reasonable counsel and consultant fees and
expenses, investigation and laboratory fees and expenses, and fines and
penalties, together with interest thereon from the date expended at the Default
Rate shall be paid upon demand by the applicable Borrower, and until paid shall
be charged to the applicable Borrower's account as an Advance and added to the
Obligations secured by the Liens created by the terms of this Agreement. Each
Borrower shall execute and deliver, promptly upon request, such instruments as
Agent may reasonably deem useful or necessary to permit Agent to take any such
action, and such additional notes and mortgages, as Agent may require to secure
all sums so advanced or paid by Agent or Lenders.
(f) Each Borrower shall defend and indemnify Agent and Lenders
and hold Agent and Lenders harmless from and
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against all loss, liability, damage and expense, claims, costs, fines and
penalties, including reasonable attorney's fees, suffered or incurred by Agent
or Lenders under or on account of any Environmental Laws in relation to such
Borrower or its Collateral or Real Property, including, without limitation, the
assertion of any lien thereunder, with respect to any Hazardous Discharge, the
presence of any Hazardous Substances affecting the Real Property, whether or not
the same originates or emanates from the Real Property or any contiguous real
estate, except to the extent such loss, liability or damage is directly related
to Agent or Lenders (i) placing any Hazardous Substance on the Real Property,
(ii) failing to properly dispose of Hazardous Waste, (iii) causing a Hazardous
Discharge on the Real Property or (iv) failing to act in a commercially
reasonable manner. Agent may, in the event it is dissatisfied, in the exercise
of its reasonable judgment, with counsel employed by any Borrower, employ
counsel separate from counsel employed by such Borrower in any such action and
participate in the defense thereof, at the expense of such Borrower. The
Borrowers' obligations and the indemnifications hereunder shall survive the
termination of this Agreement.
(g) If a Lien is filed against any Real Property by any
governmental authority resulting from the need to expend or the actual expending
of monies arising from an action or omission, whether intentional or
unintentional, of any Borrower for which such Borrower is responsible, resulting
in the releasing, spilling, leaking, leaching, pumping, emitting, pouring,
emptying or dumping of any Hazardous Substance into the waters or onto land
located within or without the state where the Real Property is located, then
within thirty (30) days from the date such Borrower is first given notice that
such Lien has been filed against the Real Property (or within such shorter
period of time as may be specified by Agent if such governmental authority has
commenced steps to cause the Real Property to be sold pursuant to such Lien)
either (i) pay the claim and remove the Lien, or (ii) furnish a cash deposit,
bond, or such other security with respect thereto as is satisfactory in all
respects to Agent and is sufficient to effect a complete discharge of such Lien
on the Real Property. If any Borrower fails to do either (i) or (ii) above in a
timely manner, Agent and Lenders shall have the right, but not the obligation,
to do so and all such costs or expenses incurred by Agent and Lenders in
connection therewith, together with interest thereon from the date expended at
the Default Rate shall be paid upon demand by such Borrower and until paid shall
be added to the Obligations secured by the Liens created by the terms of this
Agreement.
V. REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants as follows:
5.1 AUTHORITY. Each Borrower has full power, authority and legal
right to enter into this Agreement and the Other Documents and perform all
Obligations hereunder and thereunder. The execution, delivery and performance
hereof and of
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the Other Documents are within each Borrower's corporate powers, have been duly
authorized, are not in contravention of law or the terms of each Borrower's
by-laws, certificate of incorporation or other applicable documents relating to
each Borrower's formation or to the conduct of each Borrower's business or of
any material agreement or undertaking to which any Borrower is a party or by
which any Borrower is bound, and will not conflict with or result in any breach
of any of the provisions of or constitute a default under or result in the
creation of any Lien except Permitted Encumbrances upon any asset of any
Borrower under the provisions of any agreement, charter, instrument, by-law, or
other instrument to which any Borrower is a party or by which it may be bound.
5.2 FORMATION AND QUALIFICATION. Each Borrower is duly incorporated
and in good standing under the laws of the State of Delaware and is qualified to
do business and is in good standing in the states listed on EXHIBIT 5.2 which
constitute all states in which qualification and good standing are necessary to
conduct its business and own its property and where the failure to so qualify
would have a material adverse effect on its business. Each Borrower has
delivered to Agent true and complete copies of its certificate of incorporation
and by-laws and will promptly notify Agent of any amendment or changes thereto.
5.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of each Borrower contained in this Agreement and the Other
Documents shall be true at the time of such Borrower's execution of this
Agreement and the Other Documents, and shall survive the execution, delivery and
acceptance thereof by Agent and the parties thereto and the closing of the
transactions described therein or related thereto. Any misrepresentation or
breach of any representation or warranty whatsoever contained in this Agreement
or the Other Documents shall be deemed material.
5.4 TAX RETURNS. Greenwich's federal tax identification number is
58-1758941, Turbine's federal tax identification number is 06-1391887, GTI's
federal tax identification number is 06-1419037, Service's federal tax
identification number is 65-0666006, Components' federal tax identification
number is 65-0666009, and GASI's federal tax identification number is 65-
0666004. Each Borrower has filed or has caused to be filed all federal, state
and local tax returns and other reports it is required by law to file and has
paid all taxes, assessments, fees and other governmental charges that are due
and payable. Except for the consolidated tax return of GCL for the fiscal years
ended ____________ ___, 199___ and __________ ____, 199__, which Greenwich
believes will be audited, the Borrowers have been examined and reported upon by
the appropriate taxing authority and have been closed by applicable statute and
satisfied for each fiscal year prior to and including the fiscal year ending
_____________ ___, 199___. To the best of each Borrower's knowledge, the
provision for taxes on the books of Borrowers are adequate for all years not
closed by applicable statutes, and for its current fiscal year, and none of the
Borrowers has any
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knowledge of any deficiency or additional assessment in connection therewith not
provided for on its books.
5.5 FINANCIAL STATEMENTS.
(a) The pro forma balance sheet of Borrowers on a combined
basis (the "Pro Forma Balance Sheet") furnished to Agent on the Effective Date
reflects the consummation of the transactions contemplated by the Purchase
Agreement, the Indenture and under this Agreement (the "Transactions") and is
accurate, complete and correct and fairly reflects the financial condition of
Borrowers as of the Effective Date after giving effect to the Transactions, and
has been prepared in accordance with GAAP, consistently applied. The Pro Forma
Balance Sheet of Borrowers on a combined basis has been certified as accurate,
complete and correct in all material respects by the President and Chief
Financial Officer of Greenwich. All financial statements referred to in this
subsection 5.5(a), including the related schedules and notes thereto, have been
prepared, in accordance with GAAP, except as may be disclosed in such financial
statements.
(b) The combined audited balance sheet of Greenwich and its
Subsidiaries as of March 31, 1996, and the related statements of income, changes
in stockholders' equity, and changes in financial position for the period ended
on such date, all accompanied by reports thereon containing opinions without
qualification by independent certified public accountants, copies of which have
been delivered to Lender, have been prepared in accordance with GAAP
consistently applied (except for changes in application in which such
accountants concur) and present fairly the financial position of Greenwich and
its Subsidiaries at such date and the results of their operations for such
period. Since March 31, 1996, there has been no change in the consolidated
condition, financial or otherwise, of Greenwich as shown on the balance sheet as
of such date except changes in the ordinary course of business, which changes
have not (in the aggregate) been materially adverse.
(c) The twelve-month cash flow projections of the Borrowers on
a consolidated and consolidating basis and their projected balance sheets as of
the Effective Date, copies of which are annexed hereto as EXHIBIT 5.5(c) (the
"Projections"), were prepared by the Chief Financial Officer of Greenwich, are
based on underlying assumptions which provide a reasonable basis for the
projections contained therein and reflect Borrowers' judgment based on present
circumstances of the most likely set of conditions and course of action for the
projected period. The cash flow projections together with the Pro Forma Balance
Sheet, are collectively referred to as the "Pro Forma Financial Statements".
(d) The combined audited balance sheet of Aviall and its
Subsidiaries as of December 31, 1995, and the related statements of income,
changes in stockholders' equity, and changes in financial position for the
period ended on such date, all
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accompanied by reports thereon containing opinions without qualification by
independent certified public accountants, copies of which have been delivered to
Lender, have been prepared in accordance with GAAP consistently applied (except
for changes in application in which such accountants concur) and presents fairly
the financial position of Aviall and its Subsidiaries at such date and the
results of their operations for such period. The combined financial statements
of Aviall or its Subsidiaries for the fiscal period ending March 31, 1996,
previously delivered to Agent, were prepared in accordance with GAAP,
consistently applied and present fairly the financial position of Aviall and its
Subsidiaries subject to normal year-end adjustments at such date and the results
of its operations for such period. Since March 31, 1996, there has been no
change in the consolidated condition, financial or otherwise, of Aviall and its
Subsidiaries as shown on the balance sheet as of such date except changes in the
ordinary course of business, which changes have not (in the aggregate) been
materially adverse.
5.6 CORPORATE NAME. Except for Batch-Air, Inc , a Delaware
corporation and Batch-Air Universal, Inc., a Florida corporation, Greenwich has
not been known by any other corporate name in the past five years and does not
sell Inventory under any other name. Except for Gas Turbine Corporation, a
division of Chromalloy Gas Turbine Corporation and GTC East Granby Corp.,
Turbine has not been known by any other corporate name in the past five years
and does not sell Inventory under any other name. GTI, Components, Engine
Services and GASI have not been known by any other corporate name in the past
five years and except for the "CEF Division" do not sell Inventory under any
other names.
5.7 O.S.H.A. AND ENVIRONMENTAL COMPLIANCE.
(a) Each Borrower has substantially complied with, and its
facilities, business assets, property, leaseholds and equipment are in
compliance in all material respects with, the provisions of the Federal
Occupational Safety and Health Act, the Environmental Protection Act, RCRA and
all other Environmental Laws; and there are no outstanding citations, notices or
orders of substantial non-compliance issued to any Borrower or relating to its
business, assets, property, leaseholds or equipment under any such laws, rules
or regulations.
(b) Each Borrower has been issued all required material
federal, state and local licenses, certificates or permits relating to, and each
Borrower and its facilities, businesses, assets, property, leaseholds and
equipment are in compliance in all material respects with, all applicable
Environmental Laws.
ABL (i) There are no material releases, spills, discharges,
leaks or disposal (collectively referred to as "Releases") of Hazardous
Substances at, upon, under or within any Real Property or any premises leased by
any Borrower; (ii) except as set forth on EXHIBIT 5.7, there are no underground
storage tanks
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or known polychlorinated biphenyls on the Real Property or any premises leased
by any Borrower; (iii) to the best knowledge of Borrowers, neither the Real
Property nor any premises leased by any Borrower has ever been used as a
treatment, storage or disposal facility of Hazardous Waste; and (iv) to the best
knowledge of Borrowers, no Hazardous Substances are present on the Real Property
or any premises leased by any Borrower, excepting such quantities as are handled
in accordance with all applicable manufacturer's instructions and governmental
regulations and in proper storage containers and as are necessary for the
operation of the commercial business of any Borrower or of its tenants.
5.8 SOLVENCY; NO LITIGATION, VIOLATION, INDEBTEDNESS OR DEFAULT.
(a) After giving effect to the Transactions, each Borrower will
be solvent, able to pay its debts as they mature, have capital sufficient to
carry on its business and all businesses in which it is about to engage, and (i)
as of the Effective Date, the fair present saleable value of its assets,
calculated on a going concern basis, was in excess of the amount of its
liabilities and (ii) subsequent to the Effective Date, the fair saleable value
of its assets (calculated on a going concern basis) will be in excess of the
amount of its liabilities.
(b) Except as disclosed in EXHIBIT 5.8(b), no Borrower has (i)
pending or threatened litigation, actions or proceedings which involve the
possibility of materially and adversely affecting Borrowers' business, assets,
operations, condition or prospects, financial or otherwise, taken as a whole, or
the Collateral, or the ability of any Borrower to perform its obligations under
this Agreement, and (ii) any liabilities or Indebtedness for borrowed money
other than the Obligations.
(c) No Borrower is in violation of any applicable statute,
regulation or ordinance in any respect materially and adversely affecting the
Collateral or Borrowers' business, assets, operations or condition or prospects,
financial or otherwise, taken as a whole, nor is any Borrower in violation of
any order of any court, governmental authority or arbitration board or tribunal.
(d) Borrowers have received no notice that they are not in full
compliance in all material respects with any of the requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or its regulations
and, (i) they have not engaged in any Prohibited Transactions as defined in
Section 406 of ERISA or Section 4975 of the Internal Revenue Code as amended,
(ii) they have met all applicable minimum funding requirements under Section 302
of ERISA in respect of its plans and no funding requirements have been postponed
or delayed, (iii) they have no knowledge of any event or occurrence which would
cause the Pension Benefit Guaranty Corporation to institute proceedings under
Title IV of ERISA to terminate any employee benefit plan, (iv)
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there exists no event described in Section 4043 of ERISA, excluding subsections
4043(b)(2) and 4043(b)(3) thereof, for which the thirty (30) days notice period
contained in 12 CFR Section 26153 has not been waived, (v) they do not have any
fiduciary responsibility for investments with respect to any plan existing for
the benefit of persons other than its employees or former employees, and (vi)
they have not withdrawn, completely or partially, from any multi-employer
pension plan so as to incur liability under the Multi-Employer Pension Plan
Amendments Act of 1980. As of the Initial Closing Date and the Effective Date,
Borrowers do not maintain any benefit plans or welfare plans subject to ERISA.
5.9 PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES. All patents, patent
applications, trademarks, trademark applications, copyrights, copyright
applications, trade names, trade secrets and licenses owned or utilized by any
Borrower are set forth on EXHIBIT 5.9, are valid, and have been duly registered
or filed with all appropriate governmental authorities; there is no objection to
or pending challenge to the validity of any such material patent, trademark,
copyright, trade name, trade secret or license and Borrowers are not aware of
any grounds for any challenge, except as set forth in EXHIBIT 5.9 hereto.
5.10 LICENSES AND PERMITS. Except as set forth in EXHIBIT 5.10, each
Borrower (a) is in compliance with and (b) has procured and is now in possession
of, all material licenses or permits required by any applicable federal, state
or local law or regulation for the operation of its business in each
jurisdiction wherein it is now conducting or proposes to conduct business and
where the failure to procure such licenses or permits would have a material
adverse effect on Borrowers' business, properties, condition (financial or
otherwise) or operations, present or prospective, taken as a whole.
5.11 DEFAULT OF INDEBTEDNESS. No Borrower is in default in the payment
of the principal of or interest on any Indebtedness (excluding trade payables
not subject to written settlements) or under any instrument or agreement under
or subject to which any Indebtedness has been issued and no event has occurred
under the provisions of any such instrument or agreement which with or without
the lapse of time or the giving of notice, or both, constitutes or would
constitute an event of default thereunder.
5.12 NO DEFAULT. To the best of each Borrower's knowledge and except
as set forth on EXHIBIT 5.12 hereof, no Borrower is in default in the payment or
performance of any of its contractual obligations and no Incipient Event of
Default has occurred.
5.13 NO BURDENSOME RESTRICTIONS. No Borrower is party to any contract
or agreement the performance of which would materially and adversely restrict
Borrowers' business, assets, operations, condition or prospects (financial or
otherwise) and no Borrower has agreed or consented to cause or permit in the
future
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(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien which is not a
Permitted Encumbrance.
5.14 NO LABOR DISPUTES. No Borrower is involved in any material labor
dispute; there are no strikes or walkouts or union organization of any of
Borrowers' employees threatened or in existence and no labor contract is
scheduled to expire during the Term other than as set forth on EXHIBIT 5.14
hereto.
5.15 MARGIN REGULATIONS. No Borrower is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation U or
Regulation G of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds of any Advance
will be used for "purchasing" or "carrying" "margin stock" as defined in
Regulation U of such Board of Governors.
5.16 INVESTMENT COMPANY ACT. No Borrower is an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, nor is it controlled by such a company.
5.17 DISCLOSURE. No representation or warranty made by any Borrower in
this Agreement, in the Acquisition Agreement or in the Purchase Agreement or in
any financial statement, report, certificate or any other document furnished in
connection herewith contains any untrue statement of fact or omits to state any
fact necessary to make the statements herein or therein not misleading in any
material respect. There is no fact known to any Borrower or which reasonably
should be known to any Borrower which it has not disclosed to Agent in writing
with respect to the Transactions which materially and adversely affects the
condition (financial or otherwise), results of operations, business, or assets
of the Borrowers in any material respect.
5.18 SWAPS. No Borrower is a party to, nor will it be a party to, any
swap agreement whereby such Borrower has agreed or will agree to swap interest
rates or currencies unless same provides that damages upon termination following
an event of default thereunder are payable on an unlimited "two-way basis"
without regard to fault on the part of either party.
5.19 OTHER LOAN DOCUMENTS. None of the CIT Loan Documents, Turbine
Term Loan Documents or World Loan Documents have been amended or supplemented,
nor have any of the provisions thereof been waived, except pursuant to a written
agreement or instrument which has heretofore been delivered to Agent.
5.20 DELIVERY OF PURCHASE AGREEMENT. Agent has received complete
copies of the Purchase Agreement (including all exhibits, schedules and
disclosure letters referred to therein or
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delivered pursuant thereto, if any) and all amendments thereto, waivers relating
thereto and other side letters or agreements affecting the terms thereof. None
of such documents and agreements has been amended or supplemented, nor have any
of the provisions thereof been waived, except pursuant to a written agreement or
instrument which has heretofore been delivered to Agent.
VI. AFFIRMATIVE COVENANTS.
Each Borrower shall, until payment in full of the Obligations and
termination of this Agreement:
6.1 PAYMENT OF FEES. Pay to Agent on demand all usual and customary
fees and expenses which Agent incurs in connection with (a) the forwarding of
Advance proceeds and (b) the establishment and maintenance of any Agency Account
as provided for in Section 4.15(h). Agent may, without making demand, charge
the account of the applicable Borrower for all such fees and expenses as an
Advance and such amount shall be added to the Obligations.
6.2 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE AND ASSETS. (a)
Conduct continuously and operate actively its business according to good
business practices and maintain all of its properties useful or necessary in its
business in good working order and condition (reasonable wear and tear excepted
and except as may be disposed of without violation of the terms of this
Agreement), including, without limitation, all licenses, patents, copyrights,
trade names, trade secrets and trademarks; (b) keep in full force and effect its
existence and comply in all material respects with the laws and regulations
governing the conduct of its business; and (c) make all such reports and pay all
such franchise and other taxes and license fees and do all such other acts and
things as may be lawfully required to maintain its rights, licenses, leases,
powers and franchises under the laws of the United States of America or any
political subdivision thereof.
6.3 VIOLATIONS. Promptly notify Agent in writing of any violation of
any law, statute, regulation or ordinance of any governmental entity, or of any
agency thereof, applicable to any Borrower which may materially adversely affect
the Collateral or the Borrowers' business, assets, operations, condition or
prospects (financial or otherwise).
6.4 GOVERNMENT RECEIVABLES. Take all steps necessary to protect
Agent's interest in the Collateral under the Federal Assignment of Claims Act or
other applicable state or local statutes or ordinances and deliver to Agent,
appropriately endorsed, any instrument or chattel paper connected with any
Receivable arising out of contracts between any Borrower and the United States,
any state or any department, agency or instrumentality of any of them and notify
Agent of the existence of such Receivables to the extent required pursuant to
Section 9.6 hereof.
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6.5 FIXED CHARGE COVERAGE RATIO. Cause to be maintained as of the end
of each fiscal quarter with respect to the four (4) fiscal quarters then ended a
Fixed Charge Coverage Ratio equal to or greater than 1.2 to 1.0:
6.6 FUNDED DEBT TO EBITDA. Cause the ratio of Funded Debt to EBITDA
at the end of each fiscal quarter with respect to the four (4) fiscal quarters
then ended to be not greater than the ratio shown below opposite the date
corresponding thereto:
Quarter Ended Ratio
------------- -----
September 30, 1996(1) 5.0 to 1.0
December 31, 19961(1) 5.0 to 1.0
March 31, 1997 5.0 to 1.0
June 30, 1997 5.0 to 1.0
September 30, 1997 4.75 to 1.0
December 31, 1997 4.75 to 1.0
March 31, 1998 4.75 to 1.0
June 30, 1998 4.75 to 1.0
September 30, 1998 4.75 to 1.0
December 31, 1998 4.75 to 1.0
March 31, 1999 4.75 to 1.0
June 30, 1999 4.75 to 1.0
September 30, 1999 4.5 to 1.0
December 31, 1999 4.5 to 1.0
March 31, 2000 4.5 to 1.0
June 30, 2000 4.5 to 1.0
September 30, 2000 4.0 to 1.0
December 31, 2000 4.0 to 1.0
March 31, 2001 4.0 to 1.0
6.7 TANGIBLE NET WORTH. Cause to be maintained, Tangible Net Worth
[plus the aggregate outstanding principal amount of Subordinated Debentures] in
an aggregate amount not less than the amount shown below opposite the date
corresponding thereto:
Quarter Ended Amount
------------- ------
September 30, 1996 $ 80,000,000
December 31, 1996 $ 80,000,000
March 31, 1997 $ 80,000,000
June 30, 1997 $ 80,000,000
September 30, 1997 $ 95,000,000
December 31, 1997 $ 95,000,000
March 31, 1998 $ 95,000,000
June 30, 1998 $ 95,000,000
September 30, 1998 $110,000,000
- ---------------
(1) For September 30, 1996 such calculation is with respect to the two
(2) fiscal quarters then ended and for December 31, 1996 such calculation is
with respect to the three (3) fiscal quarters then ended.
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December 31, 1998 $110,000,000
March 31, 1999 $110,000,000
June 30, 1999 $110,000,000
September 30, 1999 $125,000,000
December 31, 1999 $125,000,000
March 31, 2000 $125,000,000
June 30, 2000 $125,000,000
September 30, 2000 $140,000,000
December 31, 2000 $140,000,000
March 31, 2001 $140,000,000
6.8 HEDGING AGREEMENTS; INTEREST RATE PROTECTION. Within ninety (90)
days of the Effective Date, enter into Rate Swap Agreements with respect to at
least ___% of the outstanding Advances [and Hedging Agreements with respect to
at least __% of the outstanding Advances], each on terms and conditions
satisfactory to Agent.
6.9 EXECUTION OF SUPPLEMENTAL INSTRUMENTS. Execute and deliver to
Agent from time to time, upon demand, such supplemental agreements, statements,
assignments and transfers, or instructions or documents relating to the
Collateral, and such other instruments as Agent may reasonably request, in order
that the full intent of this Agreement may be carried into effect.
6.10 PAYMENT OF INDEBTEDNESS. Pay, discharge or otherwise satisfy at
or before maturity (subject, where applicable, to specified grace periods and,
in the case of trade payables, to normal payment practices) all its obligations
and liabilities of whatever nature, except when the amount or validity thereof
is currently being contested in good faith by appropriate proceedings and
Borrowers shall have provided for such reserves as Agent may reasonably deem
proper and necessary, subject at all times to any applicable subordination
arrangement in favor of Lenders.
6.11 STANDARDS OF FINANCIAL STATEMENTS. Cause all statements referred
to in Sections 9.7, 9.8, 9.11 and 9.12 to be complete and correct in all
material respects (subject, in the case of interim financial statements, to
normal year-end audit adjustments) and to be prepared in reasonable detail and
as to those to which GAAP is applicable in accordance with GAAP applied
consistently throughout the periods reflected therein (except as concurred in by
such reporting accountants or officer, as the case may be, and disclosed
therein).
6.12 EXERCISE OF RIGHTS. Enforce all of its rights and pursue all
remedies available to it with diligence and in good faith, consistent with
reasonable business judgment, or at the reasonable request of Agent in
connection with the enforcement of (x) any rights it may have against any of its
Customers as a processor's, repairman's or mechanic's lienor, and (y) all of its
rights under the Acquisition Agreement and the Purchase Agreement. Agent shall
not exercise its rights under the Collateral Assignment
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made as of April 21, 1994 by Greenwich and Turbine in favor of Agent unless an
Event of Default has occurred and is continuing.
6.13 INVENTORY COMPOSITION. Maintain, at all times, a composition of
its Inventory (valued on a book value basis) in the following proportions:
(a) "new" Inventory shall be at least twenty-five percent (25%)
of total Inventory;
(b) "new", "serviceable" and "overhauled" Inventory shall be at
least forty-five percent (45%) of total Inventory; and
(c) "repairable" Inventory shall not exceed twenty percent
(20%) of total Inventory.
For the purposes hereof and in accordance with FAA regulations, "new" Inventory
shall mean Inventory which has never been used and is immediately usable,
"serviceable" or "overhauled" Inventory shall mean Inventory which is in a
condition which allows it to be returned immediately to operational status and
"repairable" Inventory shall mean Inventory which is in a condition which
requires repair prior to being returned to operational status and is usable if
repaired.
6.14 INTERIM BALANCE SHEET. Furnish Agent, within thirty (30) days of
the Effective Date, an unaudited balance sheet of Borrowers on a consolidated
and consolidating basis as at ______________ ___, 199___. Such balance sheet
shall be accurate, complete and correct and fairly reflect the financial
condition of Borrowers as of such date and shall have been prepared in
accordance with GAAP, subject to non-material audit adjustments and the absence
of the full footnote disclosures.
VII. NEGATIVE COVENANTS.
No Borrower shall, without Agent's and Required Lenders' prior written
approval (which approval will not be unreasonably withheld), until satisfaction
in full of the Obligations and termination of this Agreement:
7.1 MERGER, CONSOLIDATION, ACQUISITION AND SALE OF Assets.
(a) Enter into any merger, consolidation or other
reorganization with or into any other Person or acquire all or a substantial
portion of the assets or stock of any Person or permit any other Person to
consolidate with or merge with it; PROVIDED, THAT any Subsidiary of Greenwich
(other than Caledonian) may merge with and into Greenwich at any time without
Agent's consent.
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(b) Sell, lease, transfer or otherwise dispose of any of the
Collateral, except in the ordinary course of its business or as permitted by
Section 4.3 hereof.
7.2 CREATION OF LIENS. Create or suffer to exist any Lien, Charge,
Claim or transfer upon or against any of their respective assets and properties
Collateral now owned or hereafter acquired, except Permitted Encumbrances.
7.3 GUARANTEES. Become liable upon the obligations of any Person by
assumption, endorsement or guaranty thereof or otherwise (other than to Lenders)
except (a) as disclosed on EXHIBIT 7.3, (b) other guarantees made in the
ordinary course of business up to an aggregate amount of $500,000 at any one
time outstanding, (c) the endorsement of checks in the ordinary course of
business, (d) guaranties by ____________ of the Senior Notes and (e) the
guaranty by Greenwich of Caledonian's obligations to the Royal Bank of Scotland
pursuant to [described Overdraft Agreement] as in effective on Effective Date.
7.4 INVESTMENTS. Purchase or acquire obligations or stock of, or any
other interest in, any Person, except (a) obligations issued or guaranteed by
the United States of America or any agency thereof, (b) commercial paper with
maturities of not more than 180 days and a published rating of not less than A-l
or P-l (or the equivalent rating), (c) certificates of time deposit and bankers'
acceptances having maturities of not more than 180 days and repurchase
agreements backed by United States government securities of a commercial bank if
(i) such bank has a combined capital and surplus of at least $500,000,000, or
(ii) its debt obligations, or those of a holding company of which it is a
Subsidiary, are rated not less than A (or the equivalent rating) by a nationally
recognized investment rating agency, (d) U.S. money market funds that invest
solely in obligations issued or guaranteed by the United States of America or an
agency thereof, and (e) as permitted by Section 7.12(a) hereof.
7.5 LOANS. Make advances, loans or extensions of credit to any
Person, including without limitation, any Parent, Subsidiary or Affiliate except
(a) loans to employees in an amount not to exceed $150,000 individually and
$600,000 in the aggregate outstanding at any one time, (b) loans to other
Borrowers in an aggregate amount not to exceed [$10,000,000] outstanding at any
time so long as after giving effect to such loan, no Event of Default has
occurred and is continuing and aggregate Undrawn Availability is at least
$______________, and (c) with respect to the extension of commercial trade
credit in connection with the sale of Inventory or rendition of services in the
ordinary course of its business.
7.6 CAPITAL EXPENDITURES. Contract for, purchase or make any
expenditure or commitments for fixed or capital assets (including Capitalized
Leases) in any fiscal year in an amount in
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excess of the amounts shown below opposite the fiscal years corresponding
thereto:
Fiscal Year Ended Amount
----------------- ------
March 31, 1997 $ 7,500,000
March 31, 1998 $ 7,500,000
March 31, 1999 $ 7,500,000
March 31, 2000 $10,000,000
March 31, 2001 $10,000,000
7.7 DIVIDENDS. Declare, pay or make any dividend or distribution on
any shares of the common stock or preferred stock of any Borrower (other than
dividends or distributions payable in its stock, or split-ups or
reclassifications of its stock) or apply any of its funds, property or assets to
the purchase, redemption or other retirement of any common or preferred stock,
or of any options to purchase or acquire any such shares of common or preferred
stock of any Borrower except that so long as (a) a notice of termination with
regard to this Agreement shall not be outstanding, (b) no Event of Default or
Incipient Event of Default shall have occurred prior to and after giving effect
to such payment, (c) solely with respect to (ii) below, Borrowers shall be in
compliance with Section 6.5 hereof (computed as if the dividend has been paid as
of the end of the immediately preceding fiscal quarter), (d) after giving effect
to such dividend, aggregate Undrawn Availability is at least $___________ and
(e) the purpose for such dividend shall be set forth in writing to Agent at
least five (5) days prior to such dividend and such dividend shall in fact be
used for such purpose (i) any Borrower other than Greenwich shall be permitted
to pay dividends and distributions to Greenwich and (ii) Greenwich shall be
permitted to pay dividends on its shares of common stock to common stock
shareholders in the aggregate amount of dividends paid during any fiscal year
does not exceed $2,000,000.
7.8 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness (exclusive of trade debt) of Borrower except in respect of (i)
Indebtedness to Lenders, (ii) Indebtedness incurred for capital expenditures
permitted under Section 7.6 hereof, (iii) Indebtedness to CIT and World pursuant
to the CIT Loan Documents and World Loan Documents, as the case may be, as in
effect on the Effective Date, (iv) the Subordinated Debentures and the Senior
Notes, (v) Indebtedness secured by Turbine's Real Property located in East
Granby, CT, in an amount not greater than $____________ subject to receipt by
Agent of a Mortgagee Waiver in form and substance satisfactory to Agent in its
reasonable discretion, (vi) the Turbine Term Loan, and (vii) other Indebtedness
in an amount not greater than $__________, in the aggregate, which is unsecured
and subordinated on terms and provisions satisfactory to Required Lenders
(including, without limitation, no amortization of principal at any time, no
payment of interest following the occurrence and during the continuance of an
Event of Default and no right to accelerate such Indebtedness in
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the absence of acceleration by Agent); provided, that, with respect to
Indebtedness contemplated by subclause (vii) hereof (x) prior to and after
giving effect to the incurrence of such Indebtedness no Event of Default or
Incipient Event of Default shall have occurred, (y) Borrowers shall be in
compliance with Sections 6.5, 6.6 and 6.7 and (z) Borrowers shall have provided
Lender with a revised Business Plan allowing a continued ability by Borrowers to
be in compliance with all financial covenants for the balance of the Term.
7.9 NATURE OF BUSINESS. Substantially change the nature of the
business in which it is presently engaged, nor except as specifically permitted
hereby purchase or invest, directly or indirectly, in any assets or property
other than in the ordinary course of business for assets or property which are
useful in, necessary for and are to be used in its business in the ordinary
course as presently conducted.
7.10 TRANSACTIONS WITH AFFILIATES. Directly or indirectly, purchase,
acquire or lease any property from, or sell, transfer or lease any property to,
or otherwise deal with, any Affiliate, except transactions under the World Loan
Documents, transactions between the Borrowers as expressly permitted elsewhere
in this Agreement and other transactions in the ordinary course of business, on
an arm's-length basis on terms no less favorable than terms which would have
been obtainable from a Person other than an Affiliate, each of which
transactions are disclosed to Agent on a certificate delivered with each monthly
financial statement delivered pursuant to Section 9.8 hereof.
7.11 LEASES. Enter as lessee into any new lease arrangement for real
or personal property (unless capitalized and permitted under Section 7.6 hereof)
if after giving effect thereto, aggregate annual rental payments for all newly
leased property would exceed [$5,000,000] in any one fiscal year.
7.12 SUBSIDIARIES.
(a) Form any Subsidiary on or after the date hereof unless (i)
such Subsidiary expressly joins in this Agreement as a borrower and becomes
jointly and severally liable for the obligations of Borrowers hereunder and
under any other agreement between Borrowers and Lenders and (ii) Agent shall
have received all documents, including legal opinions, it may reasonably require
to establish compliance with each of the foregoing conditions.
(b) Enter into any partnership, joint venture or similar
arrangement.
7.13 FISCAL YEAR AND ACCOUNTING CHANGES. Change its fiscal year from
September 30 or make any change in accounting practices which is not disclosed
to Agent prior to the inception thereof except (i) in accounting treatment and
reporting practices
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as required by GAAP or (ii) in tax reporting treatment as required by law.
7.14 PREPAYMENT OF INDEBTEDNESS. Except as expressly contemplated by
the CIT Loan Documents as in effect on the Effective Date, at any time, directly
or indirectly, prepay any Indebtedness (other than to Lenders), or repurchase,
redeem, retire or otherwise acquire any Indebtedness of any Borrower.
7.15 PLEDGE OF CREDIT. Not now or hereafter pledge Agent's or any
Lender's credit on any purchases or for any purpose whatsoever or use any
portion of any Advance in or for any business other than each Borrower's
business substantially as conducted on the date of this Agreement.
VIII. CONDITIONS PRECEDENT
8.1 CONDITIONS TO EFFECTIVENESS. Neither Agent nor any Lender will be
obligated to modify as set forth herein the terms of the Existing Loan Agreement
or make any Advances hereunder unless the following conditions precedent have
been satisfied:
(a) NOTES. Agent shall have received the Notes duly executed
and delivered by an authorized officer of each Borrower;
(b) FILINGS, REGISTRATIONS AND RECORDINGS. Each document
(including, without limitation, any Uniform Commercial Code financing statement)
required by this Agreement, any related agreement or under law or reasonably
requested by Agent to be filed, registered or recorded in order to create, in
favor of Agent, a perfected security interest in or lien upon the Collateral
shall have been properly filed, registered or recorded in each jurisdiction in
which the filing, registration or recordation thereof is so required or
requested, and Agent shall have received an acknowledgment copy, or other
evidence reasonably satisfactory to it, of each such filing, registration or
recordation and satisfactory evidence of the payment of any necessary fee, tax
or expense relating thereto;
(c) PROCEEDINGS OF THE BORROWERS. Agent shall have received a
copy of the resolutions in form and substance reasonably satisfactory to Agent,
of the Board of Directors or the General Partner of each Borrower, as
applicable, authorizing (i) the execution, delivery and performance of this
Agreement, the Notes and any related agreements (collectively the "Documents")
and (ii) the granting by each Borrower of the security interests in and liens
upon its respective portion of the Collateral in each case certified by the
Secretary, an Assistant Secretary or the general partners, as applicable, of
such Borrower as of the Effective Date; and, such certificate shall state that
the resolutions thereby certified have not been amended, modified, revoked or
rescinded as of the date of such certificate;
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(d) LEGAL OPINIONS. Agent shall have received the executed
legal opinions of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, and
[Borrowers' UK counsel] in form and substance satisfactory to Agent which shall
cover such matters incident to the transactions contemplated by this Agreement
as may be reasonably requested by Agent;
(e) NO LITIGATION. (i) No litigation, investigation or
proceeding before or by any arbitrator or governmental authority shall be
continuing or threatened against any Borrower or against the officers or
directors of any Borrower other than as set forth on EXHIBIT 5.8(b) hereto (A)
in connection with the Documents or any of the transactions contemplated thereby
and which, in the reasonable opinion of Agent, is deemed material or (B) which
if adversely determined, would, in the reasonable opinion of Agent, have a
material adverse effect on the business, assets, operations or condition
(financial or otherwise) of the Borrowers; and (ii) no injunction, writ,
restraining order or other order of any nature materially adverse to the
Borrowers or the conduct of their business or inconsistent with the due
consummation of the Transactions shall have been issued by any governmental
authority;
(f) SENIOR NOTES. Agent shall have received final executed
copies of the Senior Notes which shall contain such terms and provisions
satisfactory to Agent;
(g) PLEDGE AGREEMENTS AND OTHER DOCUMENTS. Agent shall have
received (i) the executed Pledge Agreement and (ii) the executed Other
Documents, all in form and substance satisfactory to Agent;
(h) FEES. Agent shall have received all fees payable to Agent
and Lenders on or prior to the Effective Date pursuant to Article III hereof;
(i) MATERIAL ADVERSE CHANGE. There shall have been (i) no
material adverse change in, and there shall have occurred no development
(including, without limitation, damage, destruction or depreciation of the
Collateral) substantially likely to have a material adverse effect on, the
business, operations, prospects, properties (including, without limitation,
intangible properties), assets or financial or other conditions of the Borrowers
taken as a whole, and (ii) no occurrence or event subsequent to _____________
___, 199___ which shall have a material adverse effect on the rights and
remedies of Agent or any Lender or on the ability of any Borrower to perform the
Obligations;
(j) REPRESENTATIONS AND WARRANTIES; COVENANTS; EVENTS. The
Borrowers' representations and warranties contained in this Agreement and the
Other Documents shall be true and correct as of the Effective Date; Greenwich,
Turbine and GTI shall have performed and complied with all covenants, agreements
and conditions contained in the Existing Loan Agreement, herein and in
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the Other Documents which are required to have been performed or complied with
by Greenwich, Turbine and GTI on or before the Effective Date; and there shall
exist no Incipient Event of Default or Event of Default in existence on the
Effective Date.
(k) INCUMBENCY CERTIFICATES OF THE BORROWERS. Agent shall have
received a certificate of the Secretary, Assistant Secretary or general partners
of each Borrower, dated the Effective Date, as to the incumbency and signature
of the officers of each Borrower executing this Agreement, any certificate or
other documents to be delivered by it pursuant hereto, together with evidence of
the incumbency of such Secretary, Assistant Secretary or general partners;
(l) CERTIFICATES. Agent shall have received a copy of the
Articles or Certificate of Incorporation of each Borrower, and all amendments
thereto, certified by the Secretary of State or other appropriate official of
its jurisdiction of incorporation together with copies of the By-Laws of each
Borrower and all agreements among shareholders of each Borrower's shareholders
certified as accurate and complete by the Secretary of each Borrower or
certified copy of each Borrower's Partnership Agreement, as applicable;
(m) GOOD STANDING CERTIFICATES. Agent shall have received good
standing certificates for each Borrower dated not more than thirty (30) days
prior to the Effective Date, issued by the Secretary of State or other
appropriate official of each Borrower's jurisdiction of incorporation or
formation and each jurisdiction where the conduct of each Borrower's business
activities or the ownership of its properties necessitates qualification;
(n) FINANCIAL CONDITION CERTIFICATES. Agent shall have
received executed Officer's Certificates substantially in the form of EXHIBIT
8.1(n);
(o) COLLATERAL EXAMINATION. Agent shall have completed
Collateral examinations and its closing audit and received appraisals, the
results of which shall be satisfactory in form and substance to Agent, of the
Receivables and Inventory of each Borrower and all books and records in
connection therewith;
(p) PRO FORMA FINANCIAL STATEMENTS. Agent shall have received
a copy of the Pro Forma Financial Statements which shall be satisfactory in all
respects to Agent;
(q) UNDRAWN AVAILABILITY. After giving effect to the initial
Advances hereunder, Borrowers on a consolidated basis shall have Undrawn
Availability of at least $25,000,000;
(r) INSURANCE. Agent shall have received in form and substance
satisfactory to Agent, certified copies of Borrowers' casualty insurance
policies, together with loss payable
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endorsements on Agent's standard form of loss payee endorsement naming Agent as
loss payee, and certified copies of Borrowers' liability insurance policies,
together with endorsements naming Agent as a co-insured or additional insured;
(s) PAYMENT INSTRUCTIONS. Agent shall have received written
instructions from Borrowers directing the application of proceeds of the initial
Advances made pursuant to this Agreement;
(t) BLOCKED ACCOUNTS. Agent shall have received duly executed
agreements establishing the Blocked Accounts or Depository Accounts with
financial institutions acceptable to Agent for the collection or servicing of
the Receivables and proceeds of the Collateral;
(u) CONSENTS. Agent shall have received any and all consents
necessary to permit the effectuation of the transactions contemplated by this
Agreement and the Other Documents; and, Agent shall have received such consents
and waivers of such third parties as might assert claims with respect to the
Collateral, as Agent and its counsel shall deem necessary including, without
limitation, CIT and Continental;
(v) LEASEHOLD AGREEMENTS. Agent shall have received landlord,
mortgagee or warehouseman agreements satisfactory to Agent with respect to all
premises leased by Borrowers at which Inventory is located;
(w) SENIOR NOTES. Borrowers shall have received at least
$___________ from the sale of the Senior Notes;
(x) CONTRACT REVIEW. Agent shall have reviewed all material
contracts of the Borrowers including, without limitation, leases, union
contracts, labor contracts, vendor supply contracts, license agreements and
distributorship agreements and such contracts and agreements shall be
satisfactory in all respects to Agent;
(y) CLOSING CERTIFICATE. Agent shall have received a closing
certificate signed on behalf of Borrowers by the Chief Financial Officer of each
Borrower dated as of the Effective Date, stating that (i) all representations
and warranties set forth in this Agreement and the other Documents are true and
correct on and as of such date, (ii) Borrowers are on such date in compliance
with all the terms and provisions set forth in this Agreement and the Other
Documents and (iii) on such date no Incipient Event of Default or Event of
Default has occurred or is continuing;
(z) BORROWING BASE. Agent shall have received evidence from
Borrowers that the aggregate amount of Eligible Receivables and Eligible
Inventory is sufficient in value and amount to support Advances in the amount
requested by Borrowers on the Effective Date;
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(aa) OTHER AGREEMENTS. Agent shall have received final executed
copies of the Purchase Agreement and all related agreements, documents and
instruments as in effect on the Effective Date and the transactions contemplated
by such documentation shall be consummated concurrently with the making of the
initial Advances;
(ab) EQUITY OFFERING. Borrowers shall have received at least
$50,000,000 from a public equity offering and/or shall deliver common stock [of
_______] to the Seller under the Purchase Agreement with an aggregate [market
value] of at least $50,000,000;
(ac) ENVIRONMENTAL REPORTS. Agent shall have received all
environmental studies and reports prepared by independent environmental
engineering firms with respect to all real property owned or leased by Borrower;
(ad) PAYMENT INSTRUCTIONS. Agent shall have received written
instructions from Borrower directing the application of proceeds of the initial
Advances made pursuant to this Agreement;
(ae) OTHER. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated hereby, shall be reasonably satisfactory in form and
substance Agent and its counsel; and
(af) PURCHASE AGREEMENT. Agent shall have received final
executed copies of the Purchase Agreement and all related agreements, documents
and instruments as in effect on the Effective Date which shall be in form and
substance satisfactory to Agent and Lenders and Borrowers' rights thereunder,
but not its obligations, shall have been collaterally assigned to Agent for the
benefit of Lenders. The transactions contemplated by such documentation shall
be consummated prior to the Effective Date.
8.2 CONDITIONS TO EACH ADVANCE. The agreement of Lenders to make any
Advance requested to be made on any date is subject to the satisfaction of the
following conditions precedent as of the date such Advance is made:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by each Borrower in or pursuant to this
Agreement and any related agreements to which it is a party, and each of the
representations and warranties contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement or any related agreement shall be true and correct in all
material respects on and as of such date as if made on and as of such date;
(b) NO DEFAULT. No Event of Default or Incipient Event of
Default shall have occurred and be continuing on such
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date, or would exist after giving effect to the Advances requested to be made on
such date; PROVIDED, HOWEVER, that Agent, in its sole discretion, unless
otherwise directed by Required Lenders, may continue to make Advances
notwithstanding the existence of an Event of Default or Incipient Event of
Default; and
(c) MAXIMUM ADVANCES. In the case of any Advances requested to
be made, after giving effect thereto, the aggregate outstanding Advances shall
not exceed the maximum Advances permitted under Article II hereof.
Each request for an Advance by Greenwich on behalf of Borrowers hereunder shall
constitute a representation and warranty by Borrowers as of the date of such
Advance that the conditions contained in this Section 8.2 shall have been
satisfied.
IX. INFORMATION AS TO BORROWERS.
Each Borrower shall, until satisfaction in full of the Obligations and
the termination of this Agreement:
9.1 DISCLOSURE OF MATERIAL MATTERS. Promptly upon learning thereof,
report to Agent all matters materially affecting the value, enforceability or
collectibility of any portion of the Collateral including, without limitation,
the reclamation or repossession of, or the return of, a material amount of goods
or material claims or disputes asserted by any Customer or other obligor. No
Borrower will, without Agent's consent, compromise or adjust any Receivables (or
extend the time for payment thereof) or accept any returns of merchandise or
grant any additional discounts, allowances or credits thereon except for those
compromises, adjustments, returns, discounts, credits and allowances as have
been heretofore customary in the business of such Borrower.
9.2 SCHEDULES. Deliver to Agent, daily, its daily sales register.
Also, each Borrower shall deliver to Agent on or before the fifteenth (15th) day
of each month as and for the prior month (a) monthly accounts receivable agings
and (b) accounts payable schedules. Each Borrower will also deliver to Agent on
or before the twenty-fifth (25th) day of each month as and for the prior month a
report of Inventory. ___________ will deliver to Agent on or before the twenty-
fifth (25th) day of each month a reconciliation of Eligible Unbilled Receivables
as of the beginning and the end of the prior month. Further, each Borrower
shall deliver to Agent on or before the twenty-fifth (25th) day of each month a
Borrowing Base Certificate in the form annexed hereto as EXHIBIT 9.2. In
addition, each Borrower will deliver to Agent at such intervals as Agent may
reasonably require: (i) confirmatory assignment schedules, (ii) copies of
Customers' invoices, (iii) evidence of shipment or delivery, and (iv) such
further schedules, documents and/or information regarding the Collateral as
Agent may reasonably require including, without limitation, trial balances and
test verifications. Agent shall have the right to confirm and
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verify all Receivables by any manner and through any medium it considers
advisable and do whatever it may deem reasonably necessary to protect its
interests hereunder. The items to be provided under this Section are to be in
form satisfactory to Agent and executed by the Borrowers and delivered to Agent
from time to time solely for Agent's convenience in maintaining records of the
Collateral, and the Borrowers' failure to deliver any of such items to Agent
shall not affect, terminate, modify, derogate from or otherwise limit Agent's
lien on or security interest in the Collateral.
9.3 ENVIRONMENTAL REPORTS. Furnish Agent, concurrently with the
delivery of the financial statements referred to in Section 9.7, a certificate
of each Borrower signed on its behalf by its President stating, to the best of
his knowledge, that such Borrower is in compliance in all material respects with
all federal, state and local laws relating to environmental protection and
control and occupational safety and health. To the extent any Borrower is not
in compliance with the foregoing laws, the certificate shall set forth with
specificity all areas of non-compliance and the proposed action such Borrower
will implement in order to achieve full compliance.
9.4 LITIGATION. Promptly notify Agent in writing of any litigation
affecting the Borrowers, whether or not the claim is covered by insurance, and
of any suit or administrative proceeding, which may materially and adversely
affect the Collateral or Borrowers' business, assets, operations, condition or
prospects (financial or otherwise) taken as a whole.
9.5 OCCURRENCE OF DEFAULTS, ETC. Promptly notify Agent in writing
upon the occurrence of (a) any Event of Default or Incipient Event of Default;
(b) any default or event of default under the CIT Loan Documents; (c) any
default or event of default under the Subordinated Debentures or Senior Notes;
(d) any event, development or circumstance whereby any financial statements or
other reports furnished by such Borrower to Agent fail in any material respect
to present fairly, in accordance, where applicable, with GAAP consistently
applied, the financial condition or operating results of the Borrowers on a
consolidated and consolidating basis as of the date of such statements; (e) any
accumulated retirement plan funding deficiency which, if such deficiency
continued for two plan years and was not corrected as provided in Section 4971
of the Internal Revenue Code, could subject any Borrower to a tax imposed by
Section 4971 of the Internal Revenue Code; (f) each and every default by any
Borrower which might result in the acceleration of the maturity of any
Indebtedness, including the names and addresses of the holders of such
Indebtedness with respect to which there is a default existing or with respect
to which the maturity has been or could be accelerated, and the amount of such
Indebtedness; and (g) any other development in the business or affairs of any
Borrower which might reasonably be expected to be materially adverse to such
Borrower; in each case describing the
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nature thereof and the action such Borrower proposes to take with respect
thereto.
9.6 GOVERNMENT RECEIVABLES. Notify Agent promptly if any of its
Receivables in excess of $50,000 arise out of contracts between any Borrower and
the United States, any State, or any department, agency or instrumentality of
any of them.
9.7 ANNUAL FINANCIAL STATEMENTS. Furnish Agent within one hundred
five (105) days after the end of each fiscal year of Borrowers, financial
statements of Borrowers on a consolidated and consolidating basis including, but
not limited to, statements of income and stockholders' equity and changes in
financial position from the beginning of the current fiscal year to the end of
such fiscal year and the balance sheet as at the end of such fiscal year, all
prepared in accordance with GAAP applied on a basis consistent with prior
practices, and in reasonable detail and reported upon (as respects the
consolidated statements) without qualification by an independent certified
public accounting firm selected by Borrowers and reasonably satisfactory to
Agent (the "Accountants"). The report of such accounting firm shall be
accompanied by a statement of such accounting firm certifying that in making the
examination upon which such report was based either no information came to their
attention which to their knowledge constituted an Event of Default under this
Agreement or any related agreement or, if such information came to their
attention, specifying any such default, and such report shall contain or have
appended thereto calculations which set forth the Borrowers' compliance with the
requirements or restrictions imposed by Sections 6.5, 6.6, 6.7, 7.6 and 7.11.
In addition, if there has been a change in GAAP during such fiscal year which
affects the calculations referred to in Sections 6.5, 6.6, 6.7, 7.6 and/or 7.11,
the Accountants shall prepare two (2) sets of calculations referred to in
Sections 6.5, 6.6, 6.7, 7.6 and/or 7.11, one (1) set prepared in accordance with
GAAP as in effect on the Effective Date and one (1) set prepared in accordance
with GAAP as in effect as of the date of preparation.
9.8 MONTHLY FINANCIAL STATEMENTS. Furnish Agent within twenty-five
(25) days after the end of each month, an unaudited balance sheet of Borrowers
on a consolidated and consolidating basis and an unaudited statement of income
and stockholders' equity on a consolidated and consolidating basis and changes
in financial position of Borrowers reflecting results of operations from the
beginning of the fiscal year to the end of such month and for such month and
comparing Borrowers' performance during such month with the Business Plan for
such month, prepared on a basis consistent with prior practices and complete and
correct in all material respects, subject to normal year-end adjustments. In
addition, if there has been a change in GAAP during any fiscal quarter which
affects the calculations referred to in Sections 6.5, 6.6, 6.7, 7.6 and/or 7.11,
Borrowers shall prepare two (2) sets of calculations referred to in Sections
6.5, 6.6, 6.7, 7.6 and/or 7.11, one (1) set prepared in accordance with GAAP as
in effect on
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the Effective Date and one (1) set prepared in accordance with GAAP as in effect
as of the date of preparation. At the end of each calendar quarter, the reports
shall be accompanied by a certificate of each Borrower, signed on its behalf by
its President and/or Chief Financial Officer, which shall state whether an Event
of Default as specified in Article X hereof or an Incipient Event of Default has
occurred.
9.9 OTHER REPORTS. Furnish Agent as soon as available, but in any
event within ten (10) days after the issuance thereof, with copies of (a) such
financial statements, reports and returns as any Borrower shall send to its
stockholders in their capacity as stockholders and (b) any management letter
received by any Borrower from its independent certified public accountants.
9.10 ADDITIONAL INFORMATION. Furnish Agent with additional
information as Agent shall reasonably request in order to enable Agent to
determine whether the terms, covenants, provisions and conditions of this
Agreement have been complied with by Borrowers including, without limitation and
without the necessity of any request by Agent, (a) copies of all environmental
audits and reviews that have been previously obtained by Borrowers or obtained
pursuant to Section 4.18 hereof, (b) at least thirty (30) days prior thereto, of
any Borrower's opening of any new office or place of business or any Borrower's
closing of any existing office or place of business, (c) promptly upon any
Borrower's learning thereof, notice of any labor dispute to which such Borrower
may become a party, any strikes or walkouts relating to any of its plants or
other facilities, and the expiration of any labor contract to which any Borrower
is a party or by which any Borrower is bound and (d) evidence of the payment of
its rental obligations with respect to the Real Property.
9.11 BUSINESS PLAN. Furnish Agent, on or before the beginning of each
of the Borrowers' fiscal years, their Business Plan including, without
limitation, a month by month projected operating budget and cash flow of each
Borrower for such fiscal year (including an income statement for each month and
a balance sheet as at the end of the last month in each fiscal quarter) such
projections to be accompanied by a certificate signed on its behalf by its Chief
Financial Officer setting forth the assumptions on which such report has been
based and including a statement to the effect that to the best of his knowledge
such projections have been prepared on the basis of sound financial planning
practice consistent with past budgets and financial statements and that such
officer has no reason to question the reasonableness of any material assumptions
on which such projections were prepared.
9.12 APPRAISALS. Furnish Agent, when reasonably requested by Agent
(but no more than once each year), with updates of the appraisals delivered
prior to the Initial Closing Date prepared by AVMARK, Inc. or any other
appraiser satisfactory to Agent indicating any material changes from the
appraisals delivered prior to the Initial Closing Date.
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9.13 POWER BY THE HOUR AGREEMENT. Furnish Agent, no later than twenty-
five (25) days following the end of each month, with a calculation of (i)
"accrued receivables" carried on Borrower's books with respect to the Power by
the Hour Agreement or any similar "block hour" agreements executed subsequent to
the Effective Date as of the end of the immediately preceding month and (ii) the
Effective Hours Adjustment under the Power by the Hour Agreement or any similar
"block hour" agreements executed subsequent to the Effective Date as of the end
of the immediately preceding month.
9.14 ADDITIONAL DOCUMENTS. Execute and deliver to Agent, upon
request, such documents and agreements as Agent may, from time to time,
reasonably request to carry out the purposes, terms or conditions of this
Agreement.
X. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events shall
constitute an "Event of Default":
10.1 failure by Borrowers to pay any principal or interest on the
Obligations when due, whether at maturity or by reason of acceleration pursuant
to the terms of this Agreement or by notice of intention to prepay, or by
required prepayment or failure to make any other payment, fee or charge to Agent
provided for herein when due;
10.2 any representation or warranty made or deemed made by any Borrower
in this Agreement or any related agreement or in any certificate, document or
financial or other statement furnished at any time in connection herewith or
therewith shall prove to have been misleading in any material respect on the
date when made or deemed to have been made and within ten (10) days of such
occurrence such Borrower shall not have proven that such representation or
warranty was true when made;
10.3 failure by any Borrower to (i) furnish financial information (x)
when due which is not cured within five (5) Business Days after receipt of
notice from Agent of such failure (y) when requested which is unremedied for a
period of fifteen (15) days, or (ii) permit the inspection of its books or
records;
10.4 issuance of a notice of Lien, Charge, Claim, levy, assessment,
injunction or attachment (other than a Permitted Encumbrance) against a material
portion of any Borrower's property which is not stayed or lifted within thirty
(30) days;
10.5 failure or neglect of any Borrower to perform, keep or observe any
term, provision, condition or covenant herein contained, or contained in any
other agreement or arrangement, now or hereafter entered into between any
Borrower, Agent and any Lender other than a failure or neglect of any Borrower
to perform, keep or observe any term, provision, condition or covenant,
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contained in Sections 4.6, 4.7, 4.9, 4.11, 6.1, 6.3, 6.4, 6.14, 9.4 and 9.6
hereof which is cured within the earlier of (i) twenty (20) days after receipt
of notice of such breach from Agent of the occurrence of such failure or neglect
or (ii) twenty (20) days following the date on which such failure or neglect
becomes known to any officer of any Borrower;
10.6 any final judgment is rendered or judgment lien filed against any
Borrower for an amount in excess of $1,500,000 which within thirty (30) days of
such rendering or filing is not either satisfied, stayed or discharged of
record;
10.7 any Borrower, its respective Parent or any Subsidiary shall (i)
apply for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of all or a substantial
part of its property, (ii) admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business, (iii) make a general assignment for the benefit of creditors, (iv)
commence a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a
petition seeking to take advantage of any other law providing for the relief of
debtors, (vii) acquiesce to, or fail to have dismissed, within forty-five (45)
days, any petition filed against it in any involuntary case under such
bankruptcy laws, or (xiii) take any action for the purpose of effecting any of
the foregoing;
10.8 any change in any Borrower's condition or affairs (financial or
otherwise) which in Agent's reasonable opinion materially and adversely impairs
the Collateral or the ability of Borrower to perform its Obligations under this
Agreement or under the U.K. Guaranties;
10.9 any Lien created hereunder or provided for hereby or under any
related agreement for any reason ceases to or is not a valid and perfected Lien
having a first priority interest (subject to Permitted Encumbrances);
10.10 an "event of default" has been declared with respect to the
obligations of Borrowers under the CIT Loan Documents, the Subordinated
Debentures, the Senior Notes, the Indenture, the World Loan Documents, or the
Turbine Term Loan Documents, or the Service Agreement dated as of January 17,
1995 between Greenwich and Continental Airlines, Inc. ("Continental") (as may be
amended from time to time, "Service Agreement") shall be terminated due to a
breach by Greenwich of its obligations thereunder and as a result of such
termination Continental shall accelerate Greenwich's obligation to pay the then
outstanding balance of the Inventory Purchase Price as such term is defined in
the Inventory Purchase Agreement and require that such Inventory Purchase Price
be paid in cash;
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10.11 a default of the obligations of any Borrower under any other
agreement to which it is a party shall occur which materially and adversely
affects the condition, affairs or prospects (financial or otherwise) of the
Borrowers' taken as a whole which default is not cured within any applicable
grace period;
10.12 any Change of Control;
10.13 any material provision of this Agreement shall, for any reason,
cease to be valid and binding on any Borrower, or any Borrower shall so claim in
writing to Agent or any Lender;
10.14 a default by GCL of its obligations under the Inducement
Agreement;
10.15 Eugene Conese, Sr., shall cease to serve as Chairman and Chief
Executive Officer of Greenwich (whether by death or otherwise); or
10.16 termination or breach of the Pledge Agreement or if
Greenwich]attempts to terminate or challenge the validity of or its liability
under the Pledge Agreement.
XI. AGENT'S AND LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
11.1 RIGHTS AND REMEDIES. Upon (i) an Event of Default pursuant to
Section 10.7 all Obligations shall be automatically and immediately due and
payable and this Agreement and the obligation of Lenders to make Advances shall
be deemed terminated; (ii) any of the other Events of Default and at any time
thereafter (such default not having previously been cured or waived), at the
option of Required Lenders, all Obligations shall be immediately due and payable
and Required Lenders shall have the right to terminate this Agreement and to
terminate the obligation of Lenders to make Advances and (iii) filing of a
petition against any Borrower in any involuntary case under any state or federal
bankruptcy laws, the obligations of the Lenders to make Advances to such
Borrower hereunder shall be terminated other than as may be permitted by an
appropriate order of the bankruptcy court having jurisdiction over such
Borrower. In any event, Agent shall have the right to exercise any and all
other rights and remedies provided for herein, under the Uniform Commercial Code
and at law or equity generally, including, without limitation, the right to
foreclose the security interests granted herein and to realize upon any
Collateral by any available judicial procedure and/or to take possession of and
sell any or all of the Collateral with judicial process. Agent may enter any of
the Borrowers' premises or other premises with required and necessary legal
process and without incurring liability to any Borrower therefor, and Agent may
thereupon, or at any time thereafter in accordance with the provisions of this
Agreement, in its discretion without notice or demand, take the Collateral and
remove the same to such place as Agent may deem
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advisable and Agent may require the Borrowers to make the Collateral available
to Agent at a convenient place. With or without having the Collateral at the
time or place of sale, Agent may sell the Collateral, or any part thereof, at
public or private sale, at any time or place, in one or more sales, at such
price or prices, and upon such terms, either for cash, credit or future
delivery, as Agent may elect. Except as to that part of the Collateral which is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Agent shall give the Borrowers reasonable
notification of such sale or sales, it being agreed that in all events written
notice mailed to the Borrowers via overnight mail at least five (5) Business
Days prior to such sale or sales is reasonable notification. At any public sale
Agent may bid for and become the purchaser, and Agent or any other purchaser at
any such sale thereafter shall hold the Collateral sold absolutely free from any
claim or right of whatsoever kind, including any equity of redemption and such
right and equity are hereby expressly waived and released by the Borrowers to
the fullest extent permitted by law. In connection with the exercise of the
foregoing remedies, Agent is granted permission to use all of the Borrowers'
trademarks, trade styles, trade names, patents, patent applications, licenses,
franchises and other proprietary rights which are used in connection with
Inventory for the purpose of disposing of such Inventory. The proceeds realized
from the sale of any Collateral shall be applied first to the reasonable costs,
reasonable expenses and reasonable attorneys' fees and reasonable expenses
incurred by Agent for collection and for acquisition, completion, protection,
removal, storage, sale and delivery of the Collateral; secondly to interest due
upon any of the Obligations; and thirdly to the principal of the Obligations.
If any deficiency shall arise, Borrowers shall remain liable to Agent and
Lenders therefor.
11.2 AGENT'S DISCRETION. Agent shall have the right in its reasonable
discretion to determine which rights, Liens, security interests or remedies
Agent may at any time pursue, relinquish, subordinate, or modify or to take any
other action with respect thereto and such determination will not in any way
modify or affect any of Agent's or Lenders' rights hereunder.
11.3 SETOFF. In addition to any other rights which Agent or any Lender
may have under applicable law, upon the occurrence and during the continuance of
an Event of Default hereunder, Agent and such Lender shall have a right to apply
any of the Borrowers' property held by Agent or any Lender to reduce the
Obligations.
11.4 RIGHTS AND REMEDIES NOT EXCLUSIVE. The enumeration of the
foregoing rights and remedies is not intended to be exhaustive and the exercise
of any right or remedy shall not preclude the exercise of any other right or
remedy, all of which shall be cumulative and not alternative.
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XII. WAIVERS AND JUDICIAL PROCEEDINGS
12.1 WAIVER OF NOTICE. Each Borrower hereby waives demand,
presentment, protest and notice of demand, presentment, protest, default,
non-payment, maturity, release, compromise, settlement, extensions or renewals
with respect to any and all instruments, commercial paper, accounts, contract
rights, documents, chattel paper and guaranties at any time held by Agent or any
Lender on which any Borrower may in any way be liable, and each Borrower further
waives notice of acceptance hereof, notice of loans or advances made, credit
extended, Collateral received or delivered, or any other action taken in
reliance hereon, and all other demands and notices of any description, except
such as are expressly provided for herein.
12.2 DELAY. No delay or omission on Agent's or any Lender's part in
exercising any right, remedy or option shall operate as a waiver of such or any
other right, remedy or option or of any default.
12.3 JURY WAIVER. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE: AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
XIII. EFFECTIVE DATE AND TERMINATION.
13.1 TERM. This Agreement, which shall inure to the benefit of and
shall be binding upon the respective successors and permitted assigns of each of
the Borrowers, Agent and Lenders, shall become effective on the date hereof and
shall continue in full force and effect until the last day of the Term, unless
sooner terminated as herein provided. In the event the Obligations are prepaid
in full prior to the last day of the Term and this Agreement is thereby
terminated by Borrowers (the date of such prepayment hereinafter referred to as
the "Prepayment Date"), Borrower shall pay an early termination fee in an amount
equal to (x) $1,925,000 if the Prepayment Date occurs from the Effective Date to
and including the date immediately preceding the first anniversary of the
Effective Date, (y) $1,225,000 if the Prepayment Date occurs from the first
anniversary of the Effective Date to and including the date immediately
preceding the second anniversary of
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the Effective Date, and (z) $525,000 if the Prepayment Date occurs on or after
the second anniversary of the Effective Date to and including the date
immediately preceding the fifth anniversary of the Effective Date.
13.2 TERMINATION. The termination of this Agreement shall not affect
any of the Borrowers', Agent's or any Lender's rights, or any of the Obligations
having their inception prior to the effective date of such termination, and the
provisions hereof shall continue to be fully operative until all transactions
entered into, rights or interests created or Obligations have been fully
disposed of, concluded or liquidated. The security interests, Liens and rights
granted to Agent hereunder and the financing statements filed hereunder shall
continue in full force and effect, notwithstanding the termination of this
Agreement or the fact that the Borrowers' accounts may from time to time be
temporarily in a zero or credit position, until Borrowers' rights to borrow
under this Agreement have been terminated all of the Obligations of the
Borrowers have been paid or performed in full or the Borrowers have furnished
Agent and Lenders with an indemnification reasonably satisfactory to Agent with
respect to any existing, pending or threatened claims or an existing state of
facts which might, in Agent's reasonable judgment which is exercised in good
faith and not in an arbitrary or capricious manner, give rise to an Obligation
hereunder. Accordingly, each Borrower waives any rights which it may have under
Section 9-404(1) of the Uniform Commercial Code to demand the filing of
termination statements with respect to the Collateral, and Agent and Lenders
shall not be required to send such termination statements to Borrowers, or to
file them with any filing office, unless and until this Agreement shall have
been terminated in accordance with its terms and all Obligations paid in full in
immediately available funds or satisfied as set forth in the preceding sentence.
If there are no existing, pending or threatened claims or existing state of
facts which might, in Agent's reasonable judgment which is exercised in good
faith and not in an arbitrary or capricious manner, give rise to an Obligation
hereunder and the Obligations of the Borrowers shall have been paid in full and
this Agreement terminated, Agent shall deliver termination statements with
respect to the Collateral to Borrowers. All representations, warranties,
covenants, waivers and agreements contained herein shall survive termination
hereof until all Obligations are paid or performed in full unless otherwise
provided.
XIV. MISCELLANEOUS
14.1 GOVERNING LAW. This Agreement has been negotiated, executed and
delivered at and shall be deemed to have been made in New York and is to be
performed at New York and interpreted and the rights and liabilities of the
parties hereto determined, in accordance with the laws of the State of New York.
Any judicial proceeding by any Borrower against Agent or any Lender involving,
directly or indirectly, any matter or claim in any way arising out of, related
to or connected with this or any related agreement,
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shall be brought only in a state or federal court located in the City of New
York, State of New York. Any judicial proceeding brought against any Borrower
with respect to any of the Obligations, or this Agreement or any Other Documents
may be brought in any court of competent jurisdiction in the City of New York,
State of New York, United States of America, and, by execution and delivery of
this Agreement, each Borrower accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. Nothing herein shall affect the
right to serve process in any manner permitted by law or shall limit the right
of Agent or any Lender to bring proceedings against any Borrower in the courts
of any other competent jurisdiction. Each Borrower waives any objection to
jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based on FORUM NON
CONVENIENS.
14.2 ENTIRE UNDERSTANDING AND AMENDMENTS AND MODIFICATIONS.
(a) This Agreement and the Documents executed concurrently
herewith contain the entire understanding between Borrowers, Agent and Lenders
and supersede all prior agreements and understandings, if any, relating to the
subject matter hereof. Any promises, representations, warranties or guarantees
not herein or therein contained shall have no force and effect unless in
writing, signed by each Borrower's, Agent's and each Lender's respective
officers.
(b) The Required Lenders, Agent with the consent in writing of
the Required Lenders, and Borrowers may, subject to the provisions of this
Section 14.2 (b), from time to time enter into written supplemental agreements
to this Agreement or the Other Documents executed by Borrowers, for the purpose
of adding or deleting any provisions or otherwise changing, varying or waiving
in any manner the rights of Lenders, Agent or Borrowers thereunder or the
conditions, provisions or terms thereof or waiving any Event of Default
thereunder, but only to the extent specified in such written agreements;
PROVIDED, HOWEVER, that no such supplemental agreement shall, without the
consent of all Lenders:
(i) increase the Commitment Percentage of any Lender;
(ii) increase the Maximum Loan Amount;
(iii) extend the Term, the maturity of any of the Notes or
the due date for any amount payable hereunder, or decrease the rate of interest
or reduce any fee payable by Borrowers to Lenders pursuant to this Agreement;
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(iv) alter the several nature of the funding obligations
of Lenders or the definition of the term Required Lenders or alter, amend or
modify this Section 14.2(b);
(v) alter, amend or modify Sections 2.12, 2.13 or 2.14
hereof;
(vi) except as otherwise permitted hereunder, release any
Collateral during any calendar year having an aggregate value in excess of
$__________; or
(vii) change the rights and duties of Agent.
Any such supplemental agreement shall apply equally to each Lender and shall be
binding upon Borrowers, Lenders and Agent and all future holders of the
Obligations. In the case of any waiver, Borrowers, Agent and Lenders shall be
restored to their former positions and rights, and any Event of Default waived
shall be deemed to be cured and not continuing, but no waiver of a specific
Event of Default shall extend to any subsequent Event of Default (whether or not
the subsequent Event of Default is the same as the Event of Default which was
waived), or impair any right consequent thereon.
14.3 INDEMNITY. Each Borrower shall indemnify Agent and Lenders from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent or any Lender as a result of any violation of any law or in any
litigation, proceeding or investigation instituted or conducted by any
governmental agency or instrumentality or any other Person with respect to any
aspect of, or any transaction contemplated by, or referred to in, or any matter
related to, this Agreement, any Other Documents (whether or not Agent or any
Lender is a party thereto), except to the extent that any of the foregoing
arises out of the gross negligence (but not mere negligence) or willful
misconduct of the party being indemnified.
14.4 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; NEW LENDERS.
(a) This Agreement shall be binding upon and inure to the
benefit of Borrowers, Agent, each Lender, all future holders of the Obligations
and their respective successors and assigns, except that no Borrower may assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of Agent and each Lender.
(b) Each Borrower acknowledges that in the regular course of
commercial banking business one or more Lenders may at any time and from time to
time sell participating interests in the Advances to other financial
institutions (each such transferee or
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purchaser of a participating interest, a "Transferee"). Each Transferee may
exercise all rights of payment (including without limitation rights of set-off)
with respect to the portion of such Advances held by it or other Obligations
payable hereunder as fully as if such Transferee were the direct holder thereof
provided that Borrowers shall not be required to pay to any Transferee more than
the amount which it would have been required to pay to the Lender which granted
an interest in its Advances or other Obligations payable hereunder to such
Transferee had such Lender retained such interest in the Advances hereunder or
other Obligations payable hereunder and in no event shall Borrowers be required
to pay any such amount arising from the same circumstances and with respect to
the same Advances or other Obligations payable hereunder to both such Lender and
such Transferee. Each Borrower hereby grants to any Transferee a continuing
security interest in any deposits, moneys or other property actually or
constructively held by such Transferee as security for the Transferee's interest
in the Advances.
(c) Any Lender may (i) pledge and assign as collateral to any
Federal Reserve Bank all or a portion of its interest in the Advances hereunder
and (ii) upon the prior written consent of Borrowers and Agent, which consents
shall not be unreasonably withheld, sell, assign or transfer all or any part of
its rights under this Agreement and the Other Documents to one or more
additional banks or financial institutions and one or more additional banks or
financial institutions may commit to make Advances hereunder (each a "Purchasing
Lender"), in minimum amounts of not less than $5,000,000, pursuant to a
Commitment Transfer Supplement, executed by a Purchasing Lender, the Transferor
Lender, and Agent and delivered to Agent for recording. Upon such execution,
delivery, acceptance and recording, from and after the transfer effective date
determined pursuant to such Commitment Transfer Supplement, (i) Purchasing
Lender thereunder shall be a party hereto and, to the extent provided in such
Commitment Transfer Supplement, have the rights and obligations of a Lender
thereunder with a Commitment Percentage as set forth therein, and (ii) the
transferor Lender thereunder shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this Agreement, the
Commitment Transfer Supplement creating a novation for that purpose. Such
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of the Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under this Agreement and the
Other Documents. By consenting to the foregoing, Borrowers hereby agree to the
addition of such Purchasing Lender and the resulting adjustment of the
Commitment Percentages arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such transferor Lender under
this Agreement and the Other Documents. Borrowers shall execute and deliver
such further documents and do such further acts and things in order to
effectuate the foregoing.
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(d) Agent shall maintain at its address a copy of each
Commitment Transfer Supplement delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Advances owing to each
Lender from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and Borrowers, Agent and Lenders may treat each
Person whose name is recorded in the Register as the owner of the Advances
recorded therein for the purposes of this Agreement. The Register shall be
available for inspection by Borrowers or any Lender at any reasonable time and
from time to time upon reasonable prior notice. Agent shall receive a fee in
the amount of $3,500 payable by the applicable Purchasing Lender upon the
effective date of each transfer or assignment to such Purchasing Lender.
(e) Borrowers authorize each Lender to disclose to any
Transferee or Purchasing Lender and any prospective Transferee or Purchasing
Lender any and all financial information in such Lender's possession concerning
Borrowers which has been delivered to such Lender by or on behalf of Borrowers
pursuant to this Agreement or in connection with such Lender's credit evaluation
of Borrowers.
14.5 APPLICATION OF PAYMENTS. Following the occurrence and during the
continuation of an Event of Default, Agent shall have the continuing and
exclusive right to apply or reverse and re-apply any and all proceeds of
Collateral to any portion of the Obligations. To the extent that any Borrower
makes a payment or Agent or any Lender receives any payment or proceeds of the
Collateral for Borrowers' benefit, which are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, debtor in possession, receiver, custodian or any other party under any
bankruptcy law, common law or equitable cause, then, to such extent, the
Obligations or part thereof intended to be satisfied shall be revived and
continue as if such payment or proceeds had not been received by Agent or such
Lender.
14.6 NOTICE. Any notice or request hereunder may be given to
Borrowers, Agent or to any Lender at the respective addresses set forth below or
at such other address as may hereafter be specified in a notice designated as a
notice of change of address under this Section. Any notice or request hereunder
shall be given by (a) hand delivery or overnight courier, (b) registered or
certified mail, return receipt requested, (c) telex or telegram, subsequently
confirmed by registered or certified mail, or (d) telefax to the number set out
below (or such other number as may hereafter be specified in a notice designated
as a notice of change of address) with telephone communication to the recipient
or to a duly authorized officer of the recipient in the event the recipient is
not available by telephone, confirming its receipt or as subsequently confirmed
by electronic confirmation mail. Notices and requests shall, in the case of
those by mail or telegram, be deemed to have been given three (3) days after
deposit in the mail, or delivered to the telegraph office, in the case of
overnight
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courier, one (1) day after deposit in the mail addressed as provided in this
Section, or in the case of telefax, upon receipt of electronic confirmation.
(A) If to Agent, at: The Bank of New York Commercial
Corporation
1290 Avenue of the Americas
New York, New York 10104
Attention: Anthony Viola
Telephone: (212) 408-4097
Telecopier: (212) 408-4313
with a copy to: Hahn & Hessen LLP
350 Fifth Avenue
New York, New York 10118-0075
Attention: Steven J. Seif, Esq.
Telephone: (212) 736-1000
Telecopier: (212) 594-7167
(B) If to a Lender
other than Agent,
as specified on the
signature pages
hereof
(C) If to Borrowers, at: Greenwich Air Services, Inc.
4590 N.W. 36th Street, Bldg. 23
Miami, Florida 33122
Attention: Eugene Conese, Jr.,
President
Telephone: (305) 526-7032
Telecopier: (305) 526-7005
or (if by mail) at: Greenwich Air Services, Inc.
P.O. Box 522187
Miami, Florida 33152-2187
Attention: Eugene Conese, Jr.
with a copy to: Greenberg Traurig Hoffman Lipoff Rosen &
Quentel
153 East 53rd Street
New York, New York 10022
Attention: Stephen A. Weiss, Esq.
Telephone: (212) 801-9200
Telecopier: (212) 223-7161
14.7 SURVIVABILITY. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.
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14.8 EXPENSES. All reasonable costs and expenses including, without
limitation, reasonable attorneys' fees incurred by (a) Agent in its efforts to
enforce payment of any Obligation or effect collection of any Collateral, or (b)
Agent in connection with the entering into, modification, amendment and
enforcement of this Agreement or any consents or waivers hereunder and all
related agreements, documents and instruments, or (c) Agent or any Lender in
instituting, maintaining, preserving, enforcing and foreclosing of or on Agent's
security interest or Lien in any of the Collateral, whether through judicial
proceedings or otherwise, or (d) Agent or any Lender in defending or prosecuting
any actions or proceedings arising out of or relating to Agent's or any Lender's
transactions with the Borrowers, or (e) Agent in connection with any legal
advice given to Agent or any Lender with respect to its rights and obligations
under this Agreement and all related agreements other than with respect to
disputes between Agent, any Lender or any Transferee(s), may be charged to the
Borrowers' accounts and shall be part of the Obligations.
14.9 INJUNCTIVE RELIEF. Each Borrower recognizes that, in the event
such Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy at law may prove to be inadequate
relief to Agent and Lenders; therefore, each Lender, if such Lender so requests,
shall be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages to the extent permitted by law.
14.10 CAPTIONS. The captions at various places in this Agreement are
intended for convenience only and do not constitute and shall not be interpreted
as part of this Agreement.
14.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which taken together shall constitute one and the same
instrument.
14.12 RECORDATION. Agent shall not record this document unless required
to do so in order to protect its rights hereunder and upon concurrent notice to
Borrowers.
14.13 CONSEQUENTIAL DAMAGES. Neither Agent, any Lender nor any agent or
attorney for Lender shall be liable to Borrowers for consequential damages
arising from any breach of contract, tort or other wrong relating to the
establishment, administration or collection of the Obligations.
14.14 CONSTRUCTION. The parties acknowledge that each party and its
counsel have reviewed this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendments,
schedules or exhibits thereto.
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XV. BORROWING AGENCY.
15.1. BORROWING AGENCY PROVISIONS.
(a) Borrowers hereby irrevocably designate Greenwich to be
their attorney and agent and in such capacity to borrow, sign and endorse notes,
and execute and deliver all instruments, documents, writings and further
assurances now or hereafter required hereunder, on behalf of Borrowers, and
hereby authorize Agent and Lenders to pay over or credit all loan proceeds
hereunder in accordance with the request of Greenwich.
(b) The handling of this credit facility as a co-borrowing
facility with a borrowing agent in the manner set forth in this Agreement is
solely as an accommodation to the Borrowers and at their request. Neither Agent
nor any Lender shall incur liability to the Borrowers as a result thereof. To
induce Agent and each Lender to do so and in consideration thereof, each
Borrower hereby indemnifies Agent and Lenders and holds Agent and Lenders
harmless from and against any and all liabilities, expenses, losses, damages and
claims of damage or injury asserted against Agent or any Lender by any Person
arising from or incurred by reason of the handling of the financing arrangements
of the Borrowers as provided herein, reliance by Agent or any Lender on any
request or instruction from Greenwich or any other action taken by Agent or any
Lender with respect to this Section 15.1 except due to gross negligence (but not
mere negligence) or willful misconduct by the indemnified party.
(c) Except as set forth in Section 15.1(d) below, all
Obligations shall be joint and several, and each Borrower shall make payment
upon the maturity of the Obligations by acceleration or otherwise, and such
obligation and liability on the part of each Borrower shall in no way be
affected by any extensions, renewals and forbearance granted by Agent or any
Lender to any Borrower, failure of Agent or any Lender to give any Borrower
notice of borrowing or any other notice, any failure of Agent or any Lender to
pursue or preserve its rights against any Borrower, the release by Agent of any
Collateral now or hereafter acquired from any Borrower, and such agreement by
each Borrower to pay upon any notice issued pursuant thereto is unconditional
and unaffected by prior recourse by Agent or any Lender to the other Borrower or
any Collateral for such Borrowers' Obligations or the lack thereof.
15.2. WAIVER OF SUBROGATION. Each Borrower expressly waives any and all
rights of subrogation, reimbursement, indemnity, exoneration, contribution or
any other claim which such Borrower may now or hereafter have against any other
Borrower or any other Person directly or contingently liable for the Obligations
hereunder, or against or with respect to any other Borrower's property
(including, without limitation, any property which is
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Collateral for the Obligations), arising from the existence or performance of
this Agreement.
XVI. REGARDING AGENT.
16.1. APPOINTMENT. Each Lender hereby designates BNYCC to act as Agent
for such Lender under this Agreement and the Other Documents. Each Lender
hereby irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto and Agent shall hold all Collateral,
payments of principal and interest, fees (except the fees set forth in Section
3.2 and the Fee Letter), and collections received pursuant to this Agreement,
for the ratable benefit of Lenders. Agent may perform any of its duties
hereunder by or through its agents or employees. As to any matters not
expressly provided for by this Agreement (including without limitation,
collection of the Notes), Agent shall not be required to exercise any discretion
or take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be binding;
PROVIDED, HOWEVER, that Agent shall not be required to take any action which
exposes Agent to liability or which is contrary to this Agreement or the Other
Documents or applicable law unless Agent is furnished with an indemnification
reasonably satisfactory to Agent with respect thereto.
16.2. NATURE OF DUTIES. Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and the Other Documents.
Neither Agent nor any of its officers, directors, employees or agents shall be
(i) liable for any action taken or omitted by them as such hereunder or in
connection herewith, unless caused by their willful misconduct or gross (not
mere) negligence, or (ii) responsible in any manner for any recitals,
statements, representations or warranties made by any Borrower or any officer
thereof contained in this Agreement, or in any of the Other Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any of the
Other Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or any of the Other Documents
or for any failure of any Borrower to perform its obligations hereunder. Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any of the Other Documents, or to inspect the
properties, books or records of any Borrower. The duties of Agent as respects
the Advances to Borrowers shall be mechanical and administrative in nature;
Agent shall not have by reason of this Agreement a fiduciary relationship in
respect of any Lender; and nothing in this Agreement, expressed or implied, is
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intended to or shall be so construed as to impose upon Agent any obligations in
respect of this Agreement except as expressly set forth herein.
16.3. LACK OF RELIANCE ON AGENT AND RESIGNATION. Independently and
without reliance upon Agent or any other Lender, each Lender has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of each Borrower in connection with the making and the
continuance of the Advances hereunder and the taking or not taking of any action
in connection herewith, and (ii) its own appraisal of the creditworthiness of
each Borrower. Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before
making of the Advances or at any time or times thereafter except as shall be
provided by any Borrower pursuant to the terms hereof. Agent shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any agreement, document, certificate
or statement delivered in connection with or for the execution, effectiveness,
genuineness, validity, enforceability, collectability or sufficiency of this
Agreement or any Other Document, or of the financial condition of any Borrower,
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement, the
Other Documents or the financial condition of any Borrower, or the existence of
any Event of Default or any Incipient Event of Default.
Agent may resign on sixty (60) days' written notice to each of Lenders
and Borrowers and upon such resignation, the Required Lenders will promptly
designate a successor Agent reasonably satisfactory to Borrowers.
Any such successor Agent shall succeed to the rights, powers and duties
of Agent, and the term "Agent" shall mean such successor agent effective upon
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent. After any Agent's resignation as Agent, the provisions of this
Article XVI shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
16.4. CERTAIN RIGHTS OF AGENT. If Agent shall request instructions from
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any Other Document, Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have
received instructions from the Required Lenders; and Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, Lenders shall not have any right of action whatsoever against Agent
as a result of its acting or refraining
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from acting hereunder in accordance with the instructions of the Required
Lenders.
16.5. RELIANCE. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, order or other
document or telephone message believed by it to be genuine and correct and to
have been signed, sent or made by the proper person or entity, and, with respect
to all legal matters pertaining to this Agreement and the Other Documents and
its duties hereunder, upon advice of counsel selected by it. Agent may employ
agents and attorneys-in-fact and shall not be liable for the default or
misconduct of any such agents or attorneys-in-fact selected by Agent with
reasonable care.
16.6. NOTICE OF DEFAULT. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Incipient Event of Default or Event of Default
hereunder or under the Other Documents, unless Agent has received notice from a
Lender or a Borrower referring to this Agreement or the Other Documents,
describing such Incipient Event of Default or Event of Default and stating that
such notice is a "notice of default". In the event that Agent receives such a
notice, Agent shall give notice thereof to Lenders. Agent shall take such
action with respect to such Incipient Event of Default or Event of Default as
shall be reasonably directed by the Required Lenders; PROVIDED, THAT, unless and
until Agent shall have received such directions, Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Incipient Event of Default or Event of Default as it shall deem
advisable in the best interests of Lenders.
16.7. INDEMNIFICATION. To the extent Agent is not reimbursed and
indemnified by Borrowers, each Lender will reimburse and indemnify Agent in
proportion to its respective portion of the Advances (or, if no Advances are
outstanding, according to its Commitment Percentage), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against Agent in performing its
duties hereunder, or in any way relating to or arising out of this Agreement or
any Other Document; PROVIDED THAT, Lenders shall not be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's gross
negligence (but not mere negligence) or willful misconduct.
16.8. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to the obligation
of Agent to lend under this Agreement, the Advances made by it shall have the
same rights and powers hereunder as any other Lender and as if it were not
performing the duties as Agent specified herein; and the term "Lender" or any
similar term shall, unless the context clearly otherwise indicates, include
Agent in
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its individual capacity as a Lender. Agent may engage in business with any
Borrower as if it were not performing the duties specified herein, and may
accept fees and other consideration from any Borrower for services in connection
with this Agreement or otherwise without having to account for the same to
Lenders.
16.9. DELIVERY OF DOCUMENTS. To the extent Agent receives documents and
information from any Borrower pursuant to the terms of this Agreement, Agent
will promptly furnish such documents and information to Lenders.
16.10. BORROWERS' UNDERTAKING TO AGENT. Without prejudice to their
respective obligations to Lenders under the other provisions of this Agreement,
each Borrower hereby undertakes with Agent to pay to Agent from time to time on
demand all amounts from time to time due and payable by it for the account of
Agent or Lenders or any of them pursuant to this Agreement to the extent not
already paid. Any payment made pursuant to any such demand shall PRO TANTO
satisfy the relevant Borrower's obligations to make payments for the account of
Lenders or the relevant one or more of them pursuant to this Agreement.
Each of the parties has signed this Agreement as of the _____ day of
___________, 1996.
GREENWICH AIR SERVICES, INC.
By:________________________________
Its:_______________________________
GAS TURBINE CORPORATION
By:________________________________
Its:_______________________________
GREENWICH TURBINE, INC.
By:________________________________
Its:_______________________________
GASI ENGINE SERVICES CORPORATION
By:________________________________
Its:_______________________________
-95-
MCALLEN COMPONENTS, L.P.
By:________________________________
Its:_______________________________
GREENWICH AIR SERVICES-TEXAS, L.P.
By:________________________________
Its:_______________________________
THE BANK OF NEW YORK COMMERCIAL
CORPORATION, AS AGENT
By:________________________________
Its:_______________________________
THE BANK OF NEW YORK COMMERCIAL
CORPORATION, AS LENDER
By:________________________________
Its:_______________________________
Commitment Percentage _______%
-96-